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Sony Profits Dive 94 Percent

| 27 Oct 2006 14:54

Hundreds of millions of dollars in battery recalls helped to drain Sony's profits 94 percent this quarter, Variety reported Thursday.

By the Japanese company's estimation, they'll replace 9.6 million of their faulty laptop batteries to the tune of $432.4 million, meaning that Sony profits will drop despite an 8 percent increase of overall profits to $15.7 billion.

"Had it not been for the recall costs, Sony would have reported a slight increase in operating profit in the July-September period compared with the previous year," Sony chief financial officer Nobuyuki Oneda told the publication.

But batteries weren't the only thing slowing Sony profits, the video game department of the company didn't help the situation. Slow PSP sales and money pumped into PS3 research and development translated to $1.4 billion in video game revenue, a 21 percent revenue drop from last year. The video game department income went from a $70 million profit to a $369 million loss.

As The Escapist reported Sony had already prepped investors for the drop, and Sony stock actually rose four percent by the close of business Thursday.

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