Neither Sony (SNE) or Bertelsmann provide much detail into the performance of their Sony BMG music label JV, but Sony’s latest earnings release offers a few peeks, and they’re not inspiring: For Sony’s FY 07 (ended March 31 of this year), the JV saw sales drop 4%, a figure we assume has been buffed up significantly by the weak dollar.
But the company was able to boost profits via penny pinching (fewer records released means fewer marketing dollars spent, fewer people on the payroll means less overhead, etc): Income before income taxes nearly doubled, from $135 million to $257 million, on sales of $3.9 billion.
That might be it for good news. Sony doesn’t break out the Q4 performance of the JV at all, except to say it recorded a net loss “primarily due to lower revenues in the current quarter which more than offset lower restructuring expenses”. Most ominously, it predicts an increase in restructuring costs for the coming year, which we think can’t be good news for the JV’s remaining employees — unless all of that money is being spent on Clive Davis’ golden parachute.