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Blu-ray Weighing Sony Down?

The electronics giant reports bigger first quarter loss thanks to massive production costs for the Play Station 3.

By Phillip Swann


Washington, D.C. (May 16, 2007) -- Sony today reported widening losses due largely to huge production costs for its video game console, the PlayStation 3.


The PS3, which was introduced last November, includes a Blu-ray HDTV DVD player inside, which industry observers say is forcing Sony to spend significantly more on manufacturing. Rival consoles from Microsoft and Nintendo do not include high-def DVD players inside.

http://www.tvpredictions.com/sony051607.htm
 

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Those HDTV DVD players... you know how it is.



Seriously though, of course PS3 expenses are weighing Sony down; expensive hardware sold at a loss. At the same time, this has been predicted for months, stated in advance by Sony at previous investor conferences, discussed in threads innumerable, and isn't really... well, relevant almost, due to the aforementioned advance recognition.


Gaming division losses are supposed to be minimal next year, profitable again the year after. For the company as a whole this year is supposed to be extremely profitable, and even the year just ended March 31st to which this report relates was more profitable than the year before (even though specifically the 4th quarter was more lossy).
 

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Yep...no problemo....Sony did have to pay to manufacture and market these. That costs money...Next years sheet will be much better as the production costs will be a fraction of last years....It's all good. (not to mention Sony shares are up 40% in the last 6 mos despite PS3 'weighing it down'.......
)
 

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And in an article today on the Motley Fool they conclude:
Quote:
I's no secret that many Foolish contributors are bearish on the stock. Our Motley Fool CAPS community shares the same sentiment, giving Sony the lowest ranking -- one star. Meanwhile, other Japanese competitors such as Nintendo and Canon (NYSE: CAJ) sport top five-star rankings.

Toshiba has a 3 star rating on their list.
 

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Quote:
Originally Posted by khoyme /forum/post/0


And in an article today on the Motley Fool they conclude:


Toshiba has a 3 star rating on their list.

Again, if you had $10K in Sony stock 6 mos ago, you'd sell it today for $14,000. Forget the fool's predictions and ratings, I like results. Results in cash, not ratings.



So, you go spend your '3 stars', I'll go spend my $4K!
 

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I found it surprising that the stock jumped after the $580 mil quarterly loss or whatever announcement.


Either investors are taking the long term approach, or shorting the living **** out of it.


Anyways, yeah, I would have never predicted the stock would be up by 40% since the ps3's launch.
 

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Why wouldn't it? The business fundamentals continue to improve. Strong movies, strong electronics.... people have gotten so wrapped up - in forums, in the media, everywhere - with associating Sony with the PS3 that now half the world can't see the forest through the trees. People are buying the stock because Stringer is on track to raise margins to 5%, Sony is regaining leadership in their core electronics space, and a year like this one is set to be very good for Sony.


Anyway I'm a fan of the MotleyFool, but not of their predictions per se. The problem with their gaming sector analysts is that they tend to base their logic on what they see playing out on forums just like this one (plus I think they're gamers themselves... never a good combo), as well as the usual cursory high-level articles that roll on through. Every time I read their analysis on the space, there are deep flaws with their reasoning.


PS - When you short a stock, the price goes down. The price can bounce if investors are forced to cover their shorted positions.
 

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Quote:
Originally Posted by xbdestroya /forum/post/0



PS - When you short a stock, the price goes down. The price can bounce if investors are forced to cover their shorted positions.


Oops my brain isn't working. You're right of course. Maybe people are covering their shorts



I don't pay too much attention to sony, but aside from the ps3, the business is doing pretty well. I think they did pretty well for the year as well.
 

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From Bloomberg:


Sony Shares Gain After Record Net Forecast on TVs, Games Unit


By Pavel Alpeyev


May 17 (Bloomberg) -- Shares of Sony Corp., the world's second-largest consumer electronics maker, rose to the highest in almost five years after the company forecast record profit on sales of Bravia televisions and narrower losses at the games unit.


The shares rose 3.3 percent to 6,670 yen, the highest since June 13, 2002, as of 9:28 a.m. on the Tokyo Stock Exchange, compared with a 0.5 percent gain in the benchmark Nikkei 225 Stock Average.


Net income will rise to 320 billion yen ($2.6 billion) for the year ending March 31, from 126.3 billion yen, Tokyo-based Sony said yesterday. Its fiscal fourth-quarter loss widened to the biggest in four years, after the PlayStation 3 was outsold by Nintendo Co.'s Wii console.


To contact the reporter on this story: Pavel Alpeyev in Tokyo at [email protected] .


Last Updated: May 16, 2007 20:32 EDT

 

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Quote:
Originally Posted by thebland /forum/post/0


Again, if you had $10K in Sony stock 6 mos ago, you'd sell it today for $14,000. Forget the fool's predictions and ratings, I like results. Results in cash, not ratings.



So, you go spend your '3 stars', I'll go spend my $4K!

You are only looking at a shor time period. The return of 40% is rather the result of recovery from the downturn of Sony battery recall. If you look at the one year return, Sony just barely catches up with S&P and Dow. And for a longer term, it is even more dismal. It is down 6.38% over the 5 year span while S&P and Dow returns are around 40%. And there is the reason why it only has a one star rating from the Fool's. Here is one of the quote from Fools.

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Sony's revenue has grown only 5% over the past five years, while its shares have only risen a paltry 2.8% over the same time period. Why you would invest in a company this clueless and uncertain, when you could invest in the index and make more, is beyond me.
 

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40% is 40%....and it [ironically] is during the 'PS3 is weighing Blu Ray down period.......................
 

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Console always drag down ce, look at MS, they make money from Windows and other but the console section is deep in dept, they think they MAY make some money next year, 2 years after the release of the Xbox 360...
 

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Quote:
Originally Posted by thebland /forum/post/0


40% is 40%....and it [ironically] is during the 'PS3 is weighing Blu Ray down period.......................

Or maybe it is investors breathing a sigh of relief that the PS3 is selling poorly enough that Sony can't lose as much money as they feared???



Part of picking statistics to quote is finding the perfect interval to quote them. I hope you were smart enough to invest in their stock 6 months ago, and not just in the player.
 

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where does one find a Blu-Ray HDTV DVD player anyway?
 

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I love the fanboy responses of how bad Sony is doing in the face of a 40% gain in value of stock prices in the most recent 6 months. That is a monster gain for such a large company with so much outstanding stock........Spin all you like, but reality is reality... I wonder if most HD DVD folk invest for the future in money markets??
 

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Universal going Neutral thread count 9999


Blu Hurting the PS3 thread count 9999


It's a tie folks!!!!!!!!!!!



zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

 

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Quote:
Originally Posted by thebland /forum/post/0


I love the fanboy responses of how bad Sony is doing in the face of a 40% gain in value of stock prices in the most recent 6 months. That is a monster gain for such a large company with so much outstanding stock........Spin all you like, but reality is reality... I wonder if most HD DVD folk invest for the future in money markets??

Would you describe the article of my link as good or bad news for sony? Take off your blue blockers to see clearer and be honest Bland.
 
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