Sony Corp released its Q2 2008 earnings today. For the quarter ending September 30, 2008, company's revenues were down 0.5%, operating income dropped 90.1% and net income fell 71.8%.

Click here for the presentation slides and here for the 24-page PDF of the earnings release.

Sales at Sony BMG dropped 11% versus Q2 2007. Its loss for the quarter was $45 million, a deeper deficit than last year's $8 million loss. The ongoing, worldwide decline in recorded music sales were blamed for the weaker quarter, as were restructuring costs -- even though they amounted to only $4 million.

Sony's acquisition of BMG's half of the joint venture was not finalized until October 1, the first day of Q3. The impact of AC/DC's successful Black Ice will be seen in the next earnings release. The impact of Sony ownership of the former joint venture should help the company regain some of the market share it has lost over the last few years, and it should put Sony Music in a better position to incorporate music into Sony Corp's many properties.

Posted by Glenn at 10:50 AM | Link
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Sony Corp announced today it has finalized the acquisition of BMG Music. The deal brings an end to the four-year Sony BMG joint venture. The new company will be called called Sony Music Entertainment Inc.

The $1.2 billion acquisition ($900 million net of cash received) was announced on August 5 and received approval from the European Union on September 15.

What impact will this have? The company should benefit from a single, more focused leadership. In the years after the two companies joined forces, cultural differences, constant reorganizations and power struggles hurt the company. Some believe Sony BMG has lagged behind some of its competitors in digital initiatives and progress. Less debatable is that a combination of factors has lead Sony BMG to loose recorded music market share in the last four years (from a 21.5% global share to 20.1% at the end of 2007). There is definitely room for improvement.

Posted by Glenn at 9:02 AM | Link
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