Sony 2003 Annual Report Download - page 128
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Consolidated Financial Information 2003
42
As a result, Sony expects to record restructuring charges of approximately 140 billion yen across the Sony Group,
which will result in a decrease in consolidated operating income. One of the reasons for the expected decrease in
income before income taxes is the gain of 66.5 billion yen recorded in the fiscal year ended March 31, 2003, due to
the sale of Sony’s equity interest in Telemundo.
Electronics
Although sales from plasma televisions, LCD televisions, digital still cameras, personal digital assistants, CCDs,
and other products are expected to increase, Sony expects segment sales to decrease because an increase in the
percentage of PlayStation 2 hardware production outsourced to third parties will result in a decrease in intersegment
sales to the Game segment and the net effect of foreign exchange rates is likely to negatively impact results.
Operating income is also expected to decrease due to increased restructuring expenses.
Game
Although strong sales of software for the PlayStation 2 will continue, Sony expects segment sales to decrease.
Sony has set a cautious forecast of 20 million units for PlayStation 2 hardware production shipments due to concern
that the global economy will contract, and Sony expects PS one units to decrease year on year. Regarding operating
income, although growth in PlayStation 2 software sales and other factors will positively influence profitability, the
effect of the aforementioned decrease in sales, combined with the start, in earnest, of investments in next-generation
computer entertainment systems (including research and development expenses), leads Sony to anticipate a drop in
operating income.
Music
Sony expects sales to decrease due to the expected continued contraction in the music industry and a reduction
in the unit price of DVDs in the manufacturing division. However, a decrease in restructuring expenses, the benefits
of restructuring activities already carried out, and a decrease in talent-related expenses are projected to return the
segment to profitability.
Pictures
Sony forecasts that sales and operating income will decrease compared with the fiscal year ended March 31,
2003 because record sales and operating income were recorded in the fiscal year ended March 31, 2003 due to the
success of box office hits such as Spider-Man.