Sony, Panasonic, Sharp profitable, but not Nintendo

TOKYO — The recession is over for top Japanese electronics brands like Sony, Panasonic and Sharp, all of which charged back to black last quarter. But it may just be starting for Mario and the gang at Nintendo.

The maker of the Wii gaming console and DS handheld had a rough start to the fiscal year with a rare loss, a reversal from the strong numbers it enjoyed throughout the global downturn. Nintendo President Satoru Iwata even declared at one point last year his company was "recession free."

Nintendo's fortunes turned sour, however, on a strong yen and the lack of new games, the company said Thursday. That resulted in a sharp drop in software sales and DS demand.

It's an entirely different story over at Sony. The Tokyo-based electronics and entertainment giant defied expectations and rebounded decisively to gains in the April-June quarter. It also hiked its full-year earnings forecast.

Sony credited the improvement to its core electronics business. Flat-panel TVs, Vaio computers and the PlayStation 3 gaming console sold well, particularly in emerging markets in Asia.

Panasonic, Toshiba, Sharp and Fujitsu all reported similarly dramatic turnarounds.

"In this environment (of yen strength), for them to deliver these numbers, I'm very impressed," said Atul Goyal, a longtime tech analyst at CLSA Asia-Pacific Markets. "At least on the cost-cutting side of things, some of these companies are doing the right things."

Momentum at Nintendo, however, will likely stay weak for another two years, Goyal said.

Once the core of Nintendo's strategy, casual gamers are drifting to new competition such as Apple's iPhone and social networks like Facebook. Meanwhile, traditional rivals Sony and Microsoft are preparing to release their own motion-control systems later this year.

Nintendo has high hopes for the 3DS, a 3-D version of its handheld device that does not require glasses, which it plans to launch sometime before the fiscal year ends March 31. The company will also release nine software titles, including Mario, for 3DS in Japan, U.S. and European markets.

The Kyoto-based company booked a loss of $289.17 million for the three months ended March 31, compared with $485.53 million profit a year earlier. It was Nintendo's first loss in six quarters. Sales for the fiscal first quarter sank by a quarter to $2.16 billion.

The company kept its earnings projections for the fiscal year through March 2011 unchanged. It expects a net profit of $2.29 billion, down 12.5 percent from a year earlier on projected sales of $16.07 billion.

The foreign exchange woes that hurt Nintendo didn't keep Sony from climbing out of the red.

It reported net profit of 25.7 billion yen — or $294 million at current exchange rates — for the quarter. That was a sharp turnaround from a $323 million loss a year earlier. Revenue grew 3.8 percent to $22.3 billion.

It sold 5.1 million LCD TVs during the quarter, up 59 percent from last year. PlayStation 3 sales more than doubled to 2.4 million units.

Since taking over five years ago, Chief Executive Howard Stringer has been trying to unite the company's sprawling businesses, improve efficiency and rein in costs. Sony is betting big on 3-D to drive growth.

April-June profit at Panasonic totaled $502 million, much better than a $607.8 million loss a year earlier. Sales grew across the board for a wide range of products such as flat-panel TVs, Blu-ray recorders, air conditioners, rechargeable batteries, semiconductors and solar panels.

Toshiba — whose vast business ranges from household appliances to nuclear power systems — said Thursday its net profit was $5.3 million for the April-June quarter. It lost $662.84 million in the same period last year.

The company cited recovery in global demand for flash memory chips used in smartphones and digital cameras.

Sharp also rebounded from big losses a year earlier, thanks to stronger sales and cost cuts. The Osaka-based company, which is one of the world's largest producers of LCD TVs and panels, posted a net profit of $122.9 million for the quarter compared with a $289 million loss the year before.

Technology-services company Fujitsu booked a net profit of $18.3 million, rebounding from a net loss of $334.86 million last year.