Global electronics giant Sony Corp.'s group net profit fell 25.3 percent in the three months to September to 32.9 billion yen (300 million dollars), down from 44.1 billion yen a year earlier as higher corporate income tax payments hit the group.

Meanwhile, major Japanese high-tech company NEC Corp.'s group net profit surged 15 times to 15.4 billion yen in the six months to September from 1.0 billion yen a year earlier in light of huge gains from the listing of two subsidiaries, cost-cutting efforts and robust sales of mobile handsets.

Sony's pre-tax profit fell 9.8 percent to 4.41 billion yen in the September quarter from 4.88 billion yen a year earlier, while NEC's pre-tax profit in the half year nearly quadrupled to 77.7 billion yen, compared with 20.3 billion yen a year earlier on booming sales in mobile handsets.

NEC did not release figures for the second quarter.

Sony managed to hold group sales at 1.797 trillion yen in July-September, up slightly from 1.789 billion yen a year earlier.

"Although second-quarter sales and profit in the game segment declined, the electronics area, where we have been trying to boost products, began to recover," said Sony chairman and group chief executive officer Nobuyuki Ide in a statement.

Nevertheless, Sony revised down its forecast for pre-tax profit to 120 billion yen for the full year to March 2004 from the previous projection of 130 billion yen made in July, while leaving its forecast for net profit and sales for the year unchanged at 50 billion yen and 7.4 trillion yen, respectively.

Sales in the game segment plunged 35.6 percent to 161 billion yen in the July-September quarter from 250 billion yen a year earlier.

On hardware, Sony said, the drop was in reaction to brisk sales a year earlier, when a price cut for PlayStation 2 boosted sales and retailers front-loaded procurement of game consoles ahead of a planned strike by US West Coast port workers.

Sony said the relatively small decline in pre-tax profit was "due to a year-on-year improvement and the effect a net foreign exchange gain, compared with a net foreign exchange loss a year earlier."

NEC recorded a total of 70 billion yen in one-off gains from stock issuances as a result of the listing in July of NEC Electronics Corp., one of the largest initial public offerings in Japan this year, and NEC System Technologies in September.

NEC boosted its forecasts for pre-tax and net profit for the year to March 2004 by more than 30 percent from its estimates in April.

For the full year to March 2004, the major semiconductor manufacturer forecast a group net profit of 40 billion, compared with a net loss of 24.5 billion yen last year.

Sony and NEC had something in common: they were not too concerned about the recent rise in the yen, which lowers Japanese exports' price competitiveness.

"The impact of the strong yen will appear in the fourth quarter (to March but I think we will not feel so much impact in the current fiscal year," as a whole, Sony chief financial officer Takao Yuhara told reporters.

"We are immune from the yen's appreciation as our dollar-denominated imports are greater than our dollar-denominated exports, but we may need to consider the wider effect of the strong yen this year," said senior managing director Shigeo Matsumoto.

SPACE.WIRE