NJ5 said: scottie said: From the site http://financial-dictionary.thefreedictionary.com/Operating+Income Operating income, representing income from ordinary business activities, excludes expenses, such as interest and taxes. Which implies to me that Sony lost 1.7 billion from the gap between sales revenue and the sum costs of manufacture, employing workers, advertising etc. They also had to pay the sum of 1.2 billion dollars on taxes, and to cover the interest raised on the company's debt No, it's the opposite. They expect to lose $2.9 billion on their business, but including tax considerations and other income the loss is "only" $1.7 billion. Depending on what you're using the numbers for, one or the other figure is more important. For this year, net income is more important, for the future I'd say operating income is more important as it reflects what's really happening in their operations (if the negative factors don't improve).

 

Whoops, I never seem to be able to work out economics stuff. Which is awkward, cos I'm doing a course on it after the holidays (they make engineers do economics for some reason)

Microsoft MADE a profit last year. Sony DIDN'T.
That is the key difference there. Microsoft is laying people off despite a profit because they are being cautious, do you blame them?

MonstaMack said: Microsoft MADE a profit last year. Sony DIDN'T. That is the key difference there. Microsoft is laying people off despite a profit because they are being cautious, do you blame them?

 

No, they are laying people off because of this:

EDD Operating Profit Q2 2007    $375mill

EDD Operating Profit Q2 2008    $151mill

 

In the busiest quarter of the year, they have seen a 60% drop in operating profit year on year. This is worrying for them due to the coming Q3 being the slowest period of the year. Revenues will drop away sharply.

It wouldn't surprise to see the EDD show a loss come Q3, though I'd rather be in their shoes than Sony.

kowenicki said: @grooski.... Microsoft made a profit in the worst economic quarter of the last 80 years.... its not that bad really is it. But you are right Q3 will be ugly... imagine what it will be like for sony though. Neither is looking forward to it I guess. But at least ms seem to be taken action to negate the losses. Sony has said a lot but done nothing yet.

 

@kowenicki

To make any profit in this economy is a damn good effort, but with MS (as with most top level US businesses) each division must contribute profit or face heavy consequences. EDD made a profit but have then cut 1400 staff from the division, with share in another 3600 likely. This means that are really concerned about their Q3, as it looks like they should be.

True, Sony's position is far worse. They haven't done nothing, they have committed to a restructuring and have started the process of laying off 16000 staff as well as closing a manufacturing plant. With 78% of their drop in operating profit coming from the Electronics division, they really need to shake up the way that division operates more than anything. I think they are also waiting for a rebound in the US dollar versus the yen.

You know you are in a tough spot though when analysts are saying the Playstation division is a "shining beacon" at Sony right now. Beacon? With expected 40bill yen loss this quarter, its more like a torch with near-dead batteries.

I think this quarter will be massacre worldwide.

Grooski said: MonstaMack said: Microsoft MADE a profit last year. Sony DIDN'T. That is the key difference there. Microsoft is laying people off despite a profit because they are being cautious, do you blame them?   No, they are laying people off because of this: EDD Operating Profit Q2 2007    $375mill EDD Operating Profit Q2 2008    $151mill   In the busiest quarter of the year, they have seen a 60% drop in operating profit year on year. This is worrying for them due to the coming Q3 being the slowest period of the year. Revenues will drop away sharply. It wouldn't surprise to see the EDD show a loss come Q3, though I'd rather be in their shoes than Sony.

Not only will the EDD make a profit in q3 but it will post a bigger overall profit this fiscal year than the last (475 million $). Last year they had halo3 , a more conservative pricing policy and a way more conservative marketing policy .This year they had a huge marketing campaign in europe , a bigger price drop and they managed to stay profitable . Trying to even put in the same sentence MS' and sony' s situation is laughable .