Sony Corporation: Consolidated Financial Results for the First Quarter ended June 30, 2003

Significant Improvement Was Made Over the Fourth Quarter Despite Decreased Sales and Profit Year on Year

PRNewswire-FirstCall
TOKYO
07/24/2003

Sony Corporation announced today its consolidated results for the first quarter ended June 30, 2003 (April 1, 2003 to June 30, 2003).

   Highlights

  * Consolidated sales were Yen 1,603.8 billion ($13.4 billion), a decrease
    of 6.9% compared with the same quarter of the previous year.  Operating
    income decreased Yen 35.2 billion to Yen 16.7 billion ($139 million).
    Net income was Yen 1.1 billion ($9 million), a decrease of
    Yen 56.1 billion.  In the fourth quarter ended March 31, 2003, operating
    loss was Yen 116.5 billion, and net loss was Yen 111.1 billion.

  * Sales in the Electronics segment decreased 9.8% primarily due to a
    decrease in sales of the Televisions category resulting from a
    contraction of the market for CRT televisions.  Increased competition
    put downward pressure on prices in all categories, especially the
    Televisions and Video categories, resulting in a Yen 36.3 billion
    decrease in operating income to Yen 12.8 billion ($107 million).

  * In the Game segment, a decrease in both hardware and software sales
    brought about an 18.2% decrease in overall sales.  Reflecting a
    proactive increase in research and development expenses for
    semiconductors in anticipation of future businesses, operating income
    decreased Yen 0.8 billion to Yen 1.8 billion ($15 million).

  * Due to a decline in sales at the U.S.-based subsidiary resulting from
    continued market contraction, sales in the Music segment decreased 8.8%.
    However, operating loss decreased Yen 4.0 billion due to an increase in
    sales at the Japan-based subsidiary and the benefit of restructuring at
    the U.S.-based subsidiary.

  * Sales decreased 13.0% in the Pictures segment due to a decrease in
    theatrical revenues compared with the same quarter of the previous year
    in which the record-breaking film, Spider-Man, was released and
    contributed significantly to sales.  Operating performance declined
    Yen 11.7 billion from the operating income recorded in the same quarter
    of the previous year, resulting in an operating loss of Yen 2.4 billion
    ($20 million).

  * Financial Services segment revenue increased 16.3% and operating income
    increased Yen 3.2 billion to Yen 14.0 billion ($117 million) due to
    improvements in valuation gains and losses from investments and
    increased insurance revenue at Sony Life Insurance Co., Ltd.

  * A one-time gain of Yen 7.7 billion ($64 million) was recorded on the
    sale of rights related to a portion of the Sony Credit Card portfolio in
    the U.S.  Consequently, operating performance in the Other segment
    improved Yen 10.0 billion to a Yen 4.0 billion ($33 million) operating
    income, from an operating loss in the same quarter of the previous year.


     (Billions of yen, millions of U.S. dollars, except per share amounts)
                                     First quarter ended June 30
                             2002         2003       Change        2003*
  Sales and operating
   revenue              Y 1,721.8    Y 1,603.8       -6.9%       $13,365
  Operating income           51.9         16.7       -67.9           139
  Income before income
   taxes                    116.6         35.8       -69.3           298
  Net income                 57.2          1.1       -98.0             9

  Net income per share of common stock
   - Basic                 Y 62.23       Y 1.24      -98.0%        $0.01
   - Diluted                 57.90         1.24      -97.9          0.01

  * U.S. dollar amounts have been translated from yen, for convenience only,
    at the rate of Yen 120=U.S.$1, the approximate Tokyo foreign exchange
    market rate as of June 30, 2003.

  Remarks by Nobuyuki Idei, Chairman and Group CEO of Sony Corporation

During the first quarter ended June 30, 2003, Sony began preparations to implement our restructuring plan and growth strategy while, at the same time, improving the competitiveness of our products, primarily in the Electronics segment. Although consolidated financial results during the quarter were weaker than those achieved in the same quarter of the previous year, they improved significantly compared to the fourth quarter ended March 31, 2003, in which a loss was recorded.

In the third quarter of this fiscal year, we will begin implementation, in earnest, of the restructuring plan we outlined at our Corporate Strategy Meeting this May. At the same time, to further enhance management's control of operations, we have constructed a system in the Electronics segment whereby sales are reported on a daily basis and inventory is reported on a weekly basis. In addition, we are planning to introduce, in the second half of the fiscal year, a variety of exciting electronics products built using proprietary technology and components.

Through these measures, Sony is working to improve profitability in advance of 2006, the 60th anniversary of our founding.

   Consolidated Results for the First Quarter ended June 30, 2003

   Unless otherwise specified, all amounts are on a U.S. GAAP basis.

Sales were Yen 1,603.8 billion ($13.4 billion), a decrease of 6.9% compared with the same quarter of the previous year (5% decrease on a local currency basis -- for all references herein to results on a local currency basis, see Note I.

  * Sales to outside customers in the Electronics segment declined
    Yen 79.4 billion, or 7.0%, in the Game segment Yen 29.2 billion, or
    19.5%, in the Pictures segment Yen 22.5 billion, or 13.0%, and in the
    Music segment Yen 9.9 billion, or 8.9%.
  * Sales to outside customers in the Financial Services segment increased
    Yen 21.1 billion, or 17.3%.

Operating income was Yen 16.7 billion ($139 million), a decrease of Yen 35.2 billion, or 67.9%, compared with the same quarter of the previous year (89% decrease on a local currency basis).

  * Principal business segments having a negative effect on the change in
    operating income:
    -- The Electronics segment, in which operating income decreased
       Yen 36.3 billion.
    -- The Pictures segment, in which operating performance declined
       Yen 11.7 billion.  An operating loss was recorded in the current
       quarter compared with operating income in the same quarter of the
       previous year.
  * Business segments having a positive effect on the change in operating
    income:
    -- The Music segment, in which operating loss decreased Yen 4.0 billion.
    -- The Financial Services segment, in which operating income increased
       Yen 3.2 billion.
    -- The Other segment, in which operating performance increased
       Yen 10.0 billion.  Operating income was recorded in the current
       quarter compared with an operating loss in the same quarter of the
       previous year.
  * Selling, general and administrative expenses decreased Yen 13.1 billion
    mainly due to a decrease in severance-related expenses, caused by the
    recording of severance-related expenses at Aiwa Co. Ltd. ("Aiwa") in the
    same quarter of the previous year, and a decrease in after-service
    expenses in the current quarter (see Note IV regarding Aiwa).
  * Restructuring charges for the current quarter amounted to
    Yen 6.5 billion ($54 million) compared to Yen 16.6 billion in the same
    quarter of the previous year.
    -- On a business segment basis, the most significant charges were
       recorded in the Electronics segment, Yen 4.6 billion ($38 million)
       compared to Yen 12.0 billion in the same quarter of the previous
       year, and in the Music segment, Yen 1.3 billion ($10.8 million)
       compared to Yen 2.9 billion in the same quarter of the previous year.

Income before income taxes was Yen 35.8 billion ($298 million), a decrease of Yen 80.9 billion, or 69.3%, compared with the same quarter of the previous year.

  * In addition to the decrease in operating income, other income decreased
    Yen 55.4 billion.
    -- The primary factor contributing to the decrease in other income was
       the recording of a Yen 66.5 billion gain in the same quarter of the
       previous year on the sale of Sony's equity interest in Telemundo
       Communications Group, Inc. and its subsidiaries ("Telemundo"), a
       U.S.-based Spanish language television network and station group,
       which had been an equity affiliate of Sony.
       ~ Sony deferred Yen 6.0 billion ($50 million) of the gain on this
         transaction due to an agreement to reimburse the purchaser against
         certain losses and claims as stipulated in the agreement.  In the
         current quarter, this deferred gain was recorded because the
         agreement expired without any claims being made.
    -- The net foreign exchange loss in the current quarter was
       Yen 0.9 billion ($7 million), compared to a net gain of
       Yen 5.7 billion in the same quarter of the previous year.
  * On the other hand, a Yen 9.7 billion decrease in other expenses,
    principally caused by a Yen 11.0 billion decrease in loss on the
    devaluation of securities investments, partially offset the decrease in
    income before income taxes.

Net income was Yen 1.1 billion ($9 million), a decrease of Yen 56.1 billion, or 98.0%, compared with the same quarter of the previous year.

  * In addition to the decrease in income before income taxes, the following
    factors negatively affected net income:
    -- Minority interest in the loss of consolidated subsidiaries decreased
       Yen 2.1 billion.
       ~ In the same quarter of the previous year, a Yen 2.4 billion
         minority interest in the loss of Aiwa was recorded.
    -- Equity in net losses of affiliated companies increased Yen
       1.3 billion.
       ~ Losses increased at Sony Ericsson Mobile Communications ("SEMC"), a
         mobile handset joint venture in which Sony has a 50% equity holding
        (see below).
  * Income tax decreased by Yen 28.2 billion due to the decrease in income
    before income taxes.  However, the effective tax rate increased to
    71% from 46% in the same quarter of the previous year.
    -- Reason for the increase in the effective tax rate:
       ~ Sony recorded additional valuation allowances related to certain
         foreign tax credits and other deferred tax assets.


   SEMC performance for the quarter ended June 30, 2003

   Sales of mobile handsets:   6.7 million units (an increase of 1.7 million
                                units)
   Net sales:                  1,125 million euro (an increase of 18.4%)
   Loss before tax:            102 million euro (a deterioration of
                                4 million euro)
   Net loss:                   88 million euro (a deterioration of 5 million
                                euro)
                                 -- In the current quarter, SEMC recorded
                                    58 million euro of restructuring charges
                                    resulting from the withdrawal from the
                                    U.S. CDMA market and the closure of a
                                    GSM research facility in Munich,
                                    Germany.
   Sony's equity in net loss:  Yen 5.8 billion ($48 million)



   Operating Performance Highlights by Business Segment


  Electronics

                             (Billions of yen, millions of U.S. dollars)
                                     First quarter ended June 30
                               2002       2003       Change         2003
  Sales and operating
   revenue                Y 1,218.9  Y 1,099.8       -9.8%        $9,165
  Operating income             49.1       12.8       -73.9           107

   Unless otherwise specified, all amounts are on a U.S. GAAP basis.

Sales were Yen 1,099.8 billion ($9,165 million), a decrease of 9.8% compared with the same quarter of the previous year (9% decrease on a local currency basis).

  * In particular, sales of the "Televisions" and "Information and
    Communications" categories declined(1).  Sales of "Televisions" declined
    because sales of CRT televisions decreased due to both the absence of
    the positive effect on demand of the 2002 soccer World Cup and the shift
    in demand towards flat panel TVs.  In "Information and Communications,"
    sales of VAIO PCs decreased because unit sales declined due to a
    strategic reduction in the product lineup.
  * Sales trends by product category (sales to outside customers):
    -- Product categories with decreased sales: "Televisions"
       (Yen 34.1 billion or -15.5%), "Information and Communications"
       (Yen 33.4 billion or -15.1%), "Audio" (Yen 19.3 billion or -11.9%),
       and "Other" (Yen 12.6 billion or -9.7%).
    -- Product categories with increased sales: "Components"
       (Yen 9.3 billion or +7.3%), "Video" (Yen 6.0 billion or +2.7%), and
       "Semiconductors" (Yen 4.7 billion or +9.7%).
  (1) Commencing with the first quarter ended June 30, 2003, Sony has partly
      realigned its product category configuration in the Electronics
      segment.  In accordance with this change, results for the same quarter
      of the previous year have been reclassified to conform to the
      presentations for the current quarter.
  * Sales trends by product:
    -- Products with the largest decreases in sales: CRT televisions, VAIO
       PCs, portable audio and home audio.
    -- Products with the largest increases in sales: digital still cameras
       ("Cybershot"), cellular phones (sold to SEMC and others) and CCDs.
  * Sales trends by geographic area:
    -- Sales decreased in the U.S., other areas and Japan.  Sales increased
       in Europe.  On a local currency basis, sales fell in all four
       geographic areas.

Operating income was Yen 12.8 billion ($107 million), a decrease of Yen 36.3 billion, or 73.9%, compared with the same quarter of the previous year (87% decrease on a local currency basis).

  * The following factors contributed to the decrease in profitability:
    -- In addition to the overall sales decrease, price declines contributed
       to a deterioration in the cost to sales ratio primarily in CRT
       televisions, digital still cameras and optical pickups.
  * The following factors partially offset the decline in profitability:
    -- Selling, general and administrative expenses decreased due to the
       absence of charges incurred to restructure Aiwa in the same quarter
       of the previous year.
    -- The positive impact of the depreciation of the yen against the euro
       exceeded the negative impact of the appreciation of the yen against
       the U.S. dollar.
  * Product categories information:
    -- Categories recording declines in operating income:
       ~ "Televisions," in which mainly sales of CRT televisions declined,
         recorded an operating loss compared to the operating income
         recorded in the same quarter of the previous year.
       ~ The profitability of "Video" declined mainly due to the decrease in
         profitability of digital still cameras and home-use video cameras,
         which resulted from price declines and increased patent-related
         expenses.
       ~ The profitability of "Audio" declined due to market shrinkage and
         price deterioration.
       ~ In the current quarter "Semiconductors" recorded an operating loss
         compared to operating income recorded in the same quarter of the
         previous year because production capacity was increased resulting
         in increased depreciation expenses.
       ~ "Information and Communications" recorded an operating loss in the
         current quarter compared to an operating income in the same quarter
         of the previous year because the profitability of personal digital
         assistants ("CLIE") deteriorated due to unit price declines in the
         U.S., its major market.
       ~ Although the operating performance of DVD drives and batteries was
         robust, profitability of "Components" declined due to price
         deterioration as a result of intensified competition resulting in
         decreased profitability of optical pickups.
    -- Categories recording improvements in operating income:
       ~ Losses decreased in "Other", in which Aiwa recorded restructuring
         charges in the same quarter of the previous year.

Inventory on June 30, 2003 was Yen 526.1 billion ($4,384 million), a Yen 50.1 billion, or 8.7%, decrease compared with the level on June 30, 2002, and a Yen 93.7 billion, or 21.7%, increase compared with the level on March 31, 2003.

  Game

                            (Billions of yen, millions of U.S. dollars)
                                    First quarter ended June 30
                            2002         2003        Change         2003
  Sales and operating
   revenue               Y 153.2      Y 125.2        -18.2%       $1,044
  Operating income           2.6          1.8        -31.6            15

    Unless otherwise specified, all amounts are on a U.S. GAAP basis.

Sales were Yen 125.2 billion ($1,044 million), a decrease of 18.2% compared with the same quarter of the previous year (19% decrease on a local currency basis).

  * Both hardware and software sales decreased compared with the same
    quarter of the previous year.
    -- With respect to hardware, sales revenue in the U.S. declined as a
       result of a decrease in unit sales of PlayStation 2 hardware, which
       occurred because unit sales increased during the same quarter of the
       previous year following a reduction in unit price.  In Europe, price
       reductions of PlayStation 2 hardware led to a decrease in hardware
       sales revenue.  On the other hand, sales revenue in Japan increased
       due to an increase in hardware unit sales resulting from the release
       of a new model of PlayStation 2.
    -- With respect to software, sales revenue in Japan and the U.S.
       decreased due to a decrease in unit sales of software, although sales
       revenue in Europe increased due to the positive impact of the
       depreciation of the yen against the euro and an increase in unit
       sales of software developed by third parties.
       ~ Unit sales of software for PlayStation decreased while those for
         PlayStation 2 increased.
  * Worldwide hardware production shipments(2):
    -- PS 2: 2.65 million units (a decrease of 1.94 million units)
    -- PS one: 0.83 million units (an increase of 0.16 million units)
  * Worldwide software production shipments(2):
    -- PS 2: 31.00 million units (an increase of 4.00 million units)
    -- PlayStation: 8.00 million units (a decrease of 5.00 million units)
  (2) Production shipment units of hardware and software are counted upon
      shipment of the products from manufacturing bases.  Sales of such
      products are recognized when the products are delivered to customers.

Operating income was Yen 1.8 billion ($15 million), a decrease of Yen 0.8 billion, or 31.6%, compared with the same quarter of the previous year.

  * Operating income decreased due to an increase in research and
    development expenses for semiconductors in anticipation of future
    businesses.  Partially offsetting these increased expenses were
    continued reductions in hardware manufacturing costs and the
    contribution to profit of an increase in unit sales of PlayStation 2
    software, in addition to the positive impact of the deterioration of the
    yen against the euro.

Inventory on June 30, 2003 was Yen 145.0 billion ($1,208 million), a Yen 4.7 billion, or 3.1%, decrease compared with the level on June 30, 2002 and a Yen 1.6 billion, or 1.1%, increase compared with the level on March 31, 2003.

  Music

                              (Billions of yen, millions of U.S. dollars)
                                     First Quarter ended June 30
                         2002        2003       Change         2003
  Sales and operating
   revenue            Y 128.3     Y 117.0         -8.8%         $975
  Operating loss        (10.0)       (6.0)         --            (50)

   The amounts presented above are the sum of the yen-translated results of
   Sony Music Entertainment Inc. ("SMEI"), a U.S.- based operation which
   aggregates the results of its worldwide subsidiaries on a U.S. dollar
   basis, and the results of Sony Music Entertainment (Japan) Inc. ("SMEJ"),
   a Japan-based operation which aggregates results in yen.  Management
   analyzes the results of SMEI in U.S. dollars, so discussion of certain
   portions of its results are specified as being on "a U.S. dollar basis."

Sales were Yen 117.0 billion ($975 million), a decrease of 8.8% compared with the same quarter of the previous year (4% decrease on a local currency basis). Of the Music segment's sales, 73% were generated by SMEI and 27% were generated by SMEJ.

  * SMEI's sales (on a U.S. dollar basis) decreased 8%.
    -- Album sales decreased in many regions worldwide due to the continued
       contraction of the global music industry brought on by piracy,
       unauthorized file sharing and CD burning as well as increased
       competition from other entertainment sectors.
    -- Disc manufacturing revenues decreased primarily due to a decline in
       the unit price of DVDs.
    -- Best selling albums included Beyonce's "Dangerously in Love,"
       Evanescence's "Fallen" and Ricky Martin's "Almas del Silencio."
  * SMEJ's sales increased 11%.
    -- Despite further contraction of the music industry in Japan, the
       contribution of several hit releases led to an increase in music
       sales at SMEJ.
    -- The title that contributed the most to sales was Chemistry's "Between
       the Lines."

In terms of profitability, an operating loss of Yen 6.0 billion ($50 million) was recorded compared with an operating loss of Yen 10.0 billion in the same quarter of the previous year, an improvement of Yen 4.0 billion year on year.

  * SMEI recorded an operating loss, primarily due to the album sales
    decline, but the amount of operating loss decreased on a U.S. dollar
    basis.
    -- Benefits were realized from aggressive restructuring implemented
       during the previous year.
       ~ Restructuring during the previous year included consolidation of
         various support functions as well as rationalization of
         manufacturing and distribution functions and facilities.
    -- Advertising and promotion expenses were reduced compared with the
       same quarter of the previous year.
    -- Restructuring expenses decreased compared with the same quarter of
       the previous year.
    -- Partially offsetting the reduction in operating loss was a decrease
       in income from SMEI's disc manufacturing operations due to the price
       decrease discussed above.
  * SMEJ recorded operating income compared to an operating loss in the same
    quarter of the previous year.
    -- Sales increased and selling, general and administrative expenses,
       particularly personnel-related expenses and advertising and promotion
       expenses, were reduced.


  Pictures

                              (Billions of yen, millions of U.S. dollars)
                                      First Quarter ended June 30
                              2002        2003       Change         2003
  Sales and operating
   revenue                 Y 173.6     Y 151.1        -13.0%      $1,259
  Operating income (loss)      9.3        (2.4)         --           (20)

   The results presented above are a yen-translation of the results of Sony
   Pictures Entertainment ("SPE"), a U.S.-based operation which aggregates
   the results of its worldwide subsidiaries on a U.S. dollar basis.
   Management analyzes the results of SPE in U.S. dollars, so discussion of
   certain portions of its results are specified as being on "a U.S. dollar
   basis."

Sales were Yen 151.1 billion ($1,259 million), a decrease of 13.0% compared with the same quarter of the previous year (7% decrease on a U.S. dollar basis).

  * The reasons for the decrease in sales (on a U.S. dollar basis) were:
    -- A decrease in theatrical revenues as compared with the same quarter
       of the previous year in which the record-breaking film, Spider-Man,
       was released and contributed significantly to sales.
       ~ Notable theatrical releases during the current quarter included
         "Anger Management" and "Daddy Day Care."
    -- A decrease in home entertainment revenues.
       ~ Lower sales of SPE titles were recorded compared to the same
         quarter of the previous year.
       ~ Rights to distribute certain third party DVD titles outside of the
         U.S. gradually expired.
  * Partially offsetting the decrease in sales was:
    -- An increase in television revenues primarily due to the extension of
       an agreement to provide Seinfeld, an SPE-distributed television
       program, to a U.S. cable network.

In terms of profitability, an operating loss of Yen 2.4 billion ($20 million) was recorded compared with operating income of Yen 9.3 billion in the same quarter of the previous year, a decrease of Yen 11.7 billion year on year.

  * Reasons for the decline in profit performance (on a U.S. dollar basis)
    were:
    -- The decrease in sales discussed above.
    -- The disappointing theatrical performance of Hollywood Homicide
       released in the current quarter.
    -- An increase in advertising and promotion expenses, which included
       expenses for the June 27, 2003 U.S. theatrical release of "Charlie's
       Angels: Full Throttle."
  * Partially offsetting the decline in profit performance were:
    -- The increase in television revenues discussed above.
    -- A provision in the same quarter of the previous year with respect to
       previously recorded income from KirchMedia.  No similar provision was
       recorded this year.
       ~ KirchMedia is an insolvent licensee in Germany of SPE's film and
         television product.


  Financial Services

                             (Billions of yen, millions of U.S. dollars)
                                    First quarter ended June 30
                           2002            2003       Change         2003
  Financial Services
   revenue              Y 128.7         Y 149.6      +16.3%        $1,247
  Operating income         10.8            14.0       +29.7           117

    Unless otherwise specified, all amounts are on a U.S. GAAP basis.

Financial Services revenue was Yen 149.6 billion ($1,247 million), an increase of 16.3% compared with the same quarter of the previous year.

  * Revenue increased primarily due to an increase in revenue at Sony Life
    Insurance Co., Ltd. ("Sony Life"). At Sony Life, revenue increased by
    Yen 18.3 billion, or 16.3%, to Yen 130.4 billion ($1,087 million)(3).
    -- Valuation gains and losses from investment in the separate account
       and the general account improved.
       ~ Valuation gains and losses from investments in the separate account
         accrue directly to the account of policyholders and, therefore, do
         not affect operating income.
    -- Insurance revenue increased due to an increase in insurance-in-force.

Operating income increased by Yen 3.2 billion, or 29.7%, to Yen 14.0 billion ($117 million) compared with the same quarter of the previous year.

  * Operating income increased primarily due to a Yen 2.5 billion, or 21.0%,
    increase in the operating income of Sony Life to Yen 14.3 billion
    ($119 million)(3).  Operating income at Sony Life increased due to the
    improvement in valuation gains and losses from investments in the
    general account and the increase in insurance revenue.
  (3) The Financial Services revenue and operating income at Sony Life are
      calculated on a U.S. GAAP basis.  Therefore, they differ from the
      results that Sony Life discloses on a Japanese statutory basis.


  Other

                              (Billions of yen, millions of U.S. dollars)
                                      First Quarter ended June 30
                              2002        2003       Change         2003
  Sales and operating
   revenue                  Y 67.5      Y 75.7       +12.1%         $631
  Operating income (loss)     (6.0)        4.0          --            33

  Unless otherwise specified, all amounts are on a U.S. GAAP basis.

Sales were Yen 75.7 billion ($631 million), a 12.1% increase compared with the same quarter of the previous year. Of sales in the Other segment, 54% were sales to outside customers.

  * A business which provides information system services to other
    businesses within Sony Group recorded increased sales.

In terms of profitability, operating income of Yen 4.0 billion ($33 million) was recorded compared with an operating loss of Yen 6.0 billion in the same quarter of the previous year, an improvement of Yen 10.0 billion.

  * A Network Application and Contents Service Sector ("NACS") -related
    business operated by a U.S. subsidiary recorded a one-time gain of
    Yen 7.7 billion ($64 million) on the sale of rights related to a portion
    of the Sony Credit Card portfolio.
  * In the same quarter of the previous year, an impairment loss for certain
    long-lived assets was recorded at a location-based entertainment
    business (consisting of retail operations and attraction-based
    entertainment) in the U.S., and severance-related expenses were recorded
    at an advertising agency business subsidiary in Japan.


  Cash Flow

   The following charts show Sony's unaudited condensed statements of cash
   flow on a consolidated basis, on a consolidated basis for all segments
   excluding the Financial Services segment, and for the Financial Services
   segment alone.  These separate condensed presentations are not required
   under U.S. GAAP, which is used in Sony's consolidated financial
   statements.  However, because the Financial Services segment is different
   in nature from Sony's other segments, Sony believes that these
   presentations may be useful in understanding and analyzing Sony's
   consolidated financial statements.  Transactions between the Financial
   Services segment and all other segments excluding the Financial Services
   segment are eliminated in the consolidated figures shown below.


  Cash Flow - Consolidated

                             (Billions of yen, millions of U.S. dollars)
                                      First Quarter ended June 30
  Cash flow                 2002         2003       Change         2003
  - From operating
     activities           Y 22.1      (Y 72.2)     Y -94.3        ($601)
  - From investing
     activities            (83.3)      (129.5)       -46.2       (1,079)
  - From financing
     activities            (39.1)       152.5       +191.5        1,271
  Cash and cash
   equivalents as of
   June 30                 561.0        663.7       +102.7        5,531

   Refer to Cash Flow - Consolidated (excluding Financial Services segment)
   and Cash Flow - Financial Services below for an analysis of cash flows.


  Cash Flow - Consolidated (excluding Financial Services segment)

                              (Billions of yen, millions of U.S. dollars)
                                       First Quarter ended June 30
  Cash flow                 2002         2003        Change        2003
  - From operating
     activities          (Y 39.0)    (Y 138.4)      Y -99.3     ($1,153)
  - From investing
     activities             51.3        (55.7)       -107.0        (464)
  - From financing
     activities            (70.5)       113.7        +184.2         947
  Cash and cash
   equivalents as
   of June 30              275.7        357.9         +82.2       2,982

During the quarter ended June 30, 2003, consolidated operating activities (excluding Financial Services segment) used Yen 138.4 billion ($1,153 million), net, an increase of Yen 99.3 billion year on year.

  * In the current quarter, although notes and accounts payable, trade
    increased in the Electronics segment, operating activities used more
    cash than they generated because of an increase in inventory in the
    Electronics segment.  Both notes and accounts payable, trade and
    inventory are influenced by seasonal factors.
  * The net use of cash increased year on year because operating income in
    the Electronics and Pictures segments decreased, and there was an
    increase in notes and accounts receivable, trade, compared to a decrease
    in the same quarter of the previous year.  While inventory also
    increased, it rose by a smaller amount than in the prior year thereby
    resulting in a smaller use of cash year on year.

Consolidated investing activities (excluding Financial Services segment) used Yen 55.7 billion ($464 million), net. In the same quarter of the previous year investing activities generated Yen 51.3 billion, net.

  * In the current quarter, Yen 67.8 billion ($565 million) was used to
    purchase fixed assets, primarily for semiconductors in the Electronics
    segment.
  * Investing activities in the same quarter of the previous year generated
    cash due to the Yen 88.4 billion of cash proceeds received on the sale
    of Telemundo.

Consolidated financing activities (excluding Financial Services segment) generated Yen 113.7 billion ($947 million), net. In the previous year financing activities used Yen 70.5 billion, net.

  * In the current quarter, short-term borrowings increased mainly due to
    the issuance of commercial paper for the purpose of raising working
    capital.


  Cash Flow - Financial Services segment
                                (Billions of yen, millions of U.S. dollars)
                                         First Quarter ended June 30
  Cash flow                       2002        2003       Change       2003
  - From operating activities   Y 61.3      Y 66.1       Y +4.8       $551
  - From investing activities   (125.2)      (76.1)       +49.1       (634)
  - From financing activities     22.0        41.3        +19.3        344
  Cash and cash equivalents
   as of June 30                 285.3       305.8        +20.5      2,549

During the quarter ended June 30, 2003, operating activities in the Financial Services segment generated Yen 66.1 billion ($551 million), net, an increase of Yen 4.8 billion year on year.

  * A Yen 66.0 billion ($550 million) increase in future insurance policy
    benefits and other was recorded due to an increase in
    insurance-in-force.

Investing activities in the Financial Services segment used Yen 76.1 billion ($634 million), net, a decrease of Yen 49.1 billion year on year.

  * Payments for investments and advances, Yen 254.9 billion
    ($2,124 million), exceeded proceeds from sales of securities
    investments, maturities of marketable securities and collections of
    advances, Yen 194.8 billion ($1,623 million), reflecting the expansion
    of the financial services businesses.

Financing activities in the Financial Services segment generated Yen 41.3 billion ($344 million), net, an increase of Yen 19.3 billion year on year.

  * Deposits from customers in the banking business increased by
    Yen 35.6 billion ($296 million).


  Notes

  Note I:   During the first quarter ended June 30, 2003, the average value
            of the yen was Yen 117.5 against the U.S. dollar and Yen
            133.1 against the euro, which was 7.3% higher against the U.S.
            dollar and 13.6% lower against the euro, compared with the
            average rate for the same quarter of the previous fiscal year.
            Operating results on a local currency basis described herein
            reflect sales and operating revenue ("sales") and operating
            income obtained by applying the yen's average exchange rate in
            the same quarter of the previous fiscal year to local
            currency-denominated monthly sales, cost of sales, and selling,
            general and administrative expenses in the current quarter.
            Local currency basis results are not reflected in Sony's
            financial statements and are not measures conforming with
            Generally Accepted Accounting Principles in the U.S. ("U.S.
            GAAP").  In addition, Sony does not believe that these measures
            are a substitute for U.S. GAAP measures.  However, Sony believes
            that local currency basis results provide additional useful
            analytical information to investors regarding operating
            performance.

  Note II:  "Sales and operating revenue" in each business segment
            represents sales and operating revenue recorded before
            intersegment transactions are eliminated.  "Operating income" in
            each business segment represents operating income recorded
            before intersegment transactions and unallocated corporate
            expenses are eliminated.

  Note III: Commencing with the first quarter ended June 30, 2003, Sony has
            partly realigned its business segment configuration.  Also, in
            NACS, expenses incurred in connection with the creation of a
            network platform business have been transferred out of the Other
            segment and reclassified as unallocated corporate expenses,
            because the expected future benefits of this business will be
            spread across the Sony Group.  In accordance with this
            realignment, results for the first quarter of the previous
            fiscal year have been reclassified to conform to the
            presentation of the first quarter of the current fiscal year.

  Note IV:  On October 1, 2002, Sony implemented a share exchange as a
            result of which Aiwa became a wholly-owned subsidiary.  On
            December 1, 2002, Sony absorbed Aiwa by merger.


  Outlook for the Fiscal Year ending March 31, 2004

  There is no change in our forecast for the fiscal year, stated below.

                                                Change from previous year
  Sales and operating revenue   Y 7,400 billion           -  1%
  Operating income                  130 billion           - 30
  Income before income taxes        130 billion           - 48
  Net income                         50 billion           - 57

Restructuring expenses of Yen 140 billion are included in the above forecast.

Assumed exchange rates: approximately Yen 115 to the U.S. dollar, approximately Yen 125 to the euro.

We have increased our capital expenditure forecast by Yen 40 billion to Yen 350 billion primarily due to higher spending on replacement equipment and increases in semiconductor manufacturing capacity. Consequently, although depreciation and amortization is not expected to change, depreciation expenses for tangible assets are expected to increase by ¥10 billion to Yen 280 billion.

  Capital expenditures
   (additions to fixed assets)    Y 350 billion          +34%
  Depreciation and
   amortization(4)                  390 billion          +11
  (Depreciation expenses for
   tangible assets)                (280 billion)         (Flat)

  (4) Including amortization of intangible assets and amortization of
      deferred insurance acquisition costs.

  Cautionary Statement

Statements made in this release with respect to Sony's current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Sony. Forward-looking statements include, but are not limited to, those statements using words such as "believe," "expect," "plans," "strategy," "prospects," "forecast," "estimate," "project," "anticipate," "may" or "might" and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These statements are based on management's assumptions and beliefs in light of the information currently available to it. Sony cautions you that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward- looking statements, and therefore you should not place undue reliance on them. You also should not rely on any obligation of Sony to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Sony disclaims any such obligation. Risks and uncertainties that might affect Sony include, but are not limited to (i) the global economic environment in which Sony operates, as well as the economic conditions in Sony's markets, particularly levels of consumer spending; (ii) exchange rates, particularly between the yen and the U.S. dollar, euro, and other currencies in which Sony makes significant sales or in which Sony's assets and liabilities are denominated; (iii) Sony's ability to continue to design and develop and win acceptance of its products and services, which are offered in highly competitive markets characterized by continual new product introductions, rapid development in technology, and subjective and changing consumer preferences (particularly in the Electronics, Game, Music and Pictures segments); (iv) Sony's ability to implement successfully personnel reduction and other business reorganization activities in its Electronics and Music segments, (v) Sony's ability to implement successfully its network strategy for its Electronics, Music, Pictures and Other segments and to develop and implement successful sales and distribution strategies in its Music and Pictures segments in light of the Internet and other technological developments; (vi) Sony's continued ability to devote sufficient resources to research and development and, with respect to capital expenditures, to correctly prioritize investments (particularly in the Electronics segment); and (vii) the success of Sony's joint ventures and alliances. Risks and uncertainties also include the impact of any future events with material unforeseen impacts.

  Business Segment Information (Unaudited)
                                (Millions of yen, millions of U.S. dollars)
                                         Three months ended June 30

  Sales and operating revenue

                            2002         2003       Change         2003
  Electronics
   Customers         Y 1,126,720  Y 1,047,332        -7.0%       $8,728
   Intersegment           92,158       52,502                       437
   Total               1,218,878    1,099,834         -9.8        9,165

  Game
   Customers             149,535      120,332        -19.5        1,003
   Intersegment            3,644        4,914                        41
   Total                 153,179      125,246        -18.2        1,044

  Music
   Customers             111,171      101,289         -8.9          844
   Intersegment           17,144       15,711                       131
   Total                 128,315      117,000         -8.8          975

  Pictures
   Customers             173,629      151,131        -13.0        1,259
   Intersegment                0            0                         0
   Total                 173,629      151,131        -13.0        1,259

  Financial Services
   Customers             121,891      142,969        +17.3        1,191
   Intersegment            6,819        6,678                        56
   Total                 128,710      149,647        +16.3        1,247

  Other
   Customers              38,860       40,727         +4.8          340
   Intersegment           28,668       34,950                       291
   Total                  67,528       75,677        +12.1          631

  Elimination          (148,433)    (114,755)           --        (956)
  Consolidated total Y 1,721,806  Y 1,603,780        -6.9%      $13,365

Electronics intersegment amounts primarily consist of transactions with the Game business.

Music intersegment amounts primarily consist of transactions with the Game and Pictures business.

Other intersegment amounts primarily consist of transactions with the Electronics business.

  Operating income (loss)
                            2002         2003       Change         2003
  Electronics           Y 49,126     Y 12,805       -73.9%         $107
  Game                     2,573        1,761        -31.6           15
  Music                  (9,950)      (5,990)           --         (50)
  Pictures                 9,266      (2,397)           --         (20)
  Financial Services      10,828       14,047        +29.7          117
  Other                  (5,974)        3,992           --           33
  Total                   55,869       24,218        -56.7          202

  Corporate and elimination(3,999)     (7,546)           --         (63)
  Consolidated operating
  income                Y 51,870     Y 16,672       -67.9%         $139

Commencing with the first quarter ended June 30, 2003, Sony has partly realigned its business segment configuration. In the Network Application and Contents Service Sector ("NACS"), expenses incurred in connection with the creation of a network platform business have been transferred out of the Other segment and reclassified as unallocated corporate expenses, because the expected future benefits of this business will be spread across the Sony Group. In accordance with these realignments, results for the previous year have been reclassified to conform to the presentation for the current year.

  Electronics Sales and Operating Revenue to Customers by Product Category

                             (Millions of yen, millions of U.S. dollars)
                                      Three months ended June 30
  Sales and operating revenue
                            2002         2003       Change         2003
  Audio                Y 161,480    Y 142,227       -11.9%       $1,185
  Video                  219,013      224,986         +2.7        1,875
  Televisions            219,637      185,516        -15.5        1,546
  Information and
   Communications        221,508      188,141        -15.1        1,568
  Semiconductors          48,354       53,055         +9.7          442
  Components             126,550      135,842         +7.3        1,132
  Other                  130,178      117,565         -9.7          980
  Total              Y 1,126,720  Y 1,047,332        -7.0%       $8,728

The above table is a breakdown of Electronics sales and operating revenue to customers in the Business Segment Information. The Electronics segment is managed as a single operating segment by Sony's management. However, Sony believes that the information in this table is useful to investors in understanding the sales contributions of the products in this business segment. In addition, commencing with the first quarter ended June 30, 2003, Sony has partly realigned its product category configuration in the Electronics segment. Accordingly, results of the previous year have been reclassified as follows:

  Main Product       Previous Product Category         New Product Category
  Set-top box        "Televisions"                     "Video"
  Computer display   "Information and Communications"  "Televisions"
  LCD television     "Information and Communications"  "Televisions"
  CRT                "Components"                      "Televisions"

  Geographic Segment Information (Unaudited)
                            (Millions of yen, millions of U.S. dollars)
                                    Three months ended June 30
  Sales and operating revenue
                            2002         2003       Change         2003
  Japan                Y 503,134    Y 511,269        +1.6%       $4,261
  United States          558,214      459,729        -17.6        3,831
  Europe                 345,727      346,798         +0.3        2,890
  Other Areas            314,731      285,984         -9.1        2,383
  Total              Y 1,721,806  Y 1,603,780        -6.9%      $13,365

Classification of Geographic Segment Information shows sales and operating revenue recognized by location of customers.

  Consolidated Statements of Income (Unaudited)
       (Millions of yen, millions of U.S. dollars, except per share amounts)

                                    Three months ended June 30
                            2002         2003       Change         2003

  Sales and operating revenue:                           %
   Net sales         Y 1,589,158  Y 1,449,222                  $ 12,077
   Financial service
    revenue              121,891      142,969                     1,191
   Other operating
    revenue               10,757       11,589                        97
                       1,721,806    1,603,780         -6.9       13,365

  Costs and expenses:
   Cost of sales       1,136,249    1,059,152                     8,827
   Selling, general and
    administrative       417,398      404,305                     3,369
   Financial service
    expenses             110,906      129,026                     1,075
   (Gain) loss on sale,
    disposal or
    impairment of
    assets, net            5,383      (5,375)                      (45)
                       1,669,936    1,587,108                    13,226

  Operating income        51,870       16,672        -67.9          139

  Other income:
   Interest and dividends  3,938        6,128                        51
   Royalty income          5,289        7,382                        62
   Foreign exchange
    gain, net              5,678           --                        --
   Gain on sale of
    securities
    investments, net      68,366        8,526                        71
   Other                   6,987       12,851                       107
                          90,258       34,887                       291

  Other expenses:
   Interest                6,830        6,155                        52
   Loss on devaluation of
    securities
    investments           11,524          500                         4
   Foreign exchange
    loss, net                  -          872                         7
   Other                   7,131        8,261                        69
                          25,485       15,788                       132

   Income before income
    taxes                116,643       35,771        -69.3          298

   Income taxes           53,633       25,384                       211

  Income before minority
   interest and equity
   in net losses of
   affiliated companies   63,010       10,387                        87

  Minority interest in
   loss of consolidated
   subsidiaries            2,607          461                         3

  Equity in net losses of
   affiliated companies    8,436        9,727                        81

  Net income            Y 57,181      Y 1,121        -98.0           $9

  Per share data:

   Common stock

    Net income
    - Basic              Y 62.23       Y 1.24        -98.0        $0.01
    - Diluted              57.90         1.24        -97.9         0.01

   Subsidiary tracking stock

    Net income (loss)
    - Basic                 7.30       (7.97)           --       (0.07)


  Consolidated Balance Sheets (Unaudited)

                            (Millions of yen, millions of U.S. dollars)
                         June 30     March 31      June 30      June 30
       ASSETS               2002         2003         2003         2003
  Current assets:
   Cash and cash
    equivalents        Y 560,977    Y 713,058    Y 663,700       $5,531
   Time deposits           6,997        3,689        4,890           41
   Marketable securities 169,060      241,520      230,028        1,917
   Notes and accounts
    receivable, trade  1,269,328    1,117,889    1,145,962        9,550
   Allowance for doubtful
    accounts and sales
    returns            (106,419)    (110,494)     (94,874)        (791)
   Inventories           769,100      625,727      720,895        6,007
   Deferred income taxes 135,657      143,999      131,244        1,094
   Prepaid expenses and
    other current assets 472,253      418,826      542,814        4,523
                       3,276,953    3,154,214    3,344,659       27,872

  Film costs             292,944      287,778      306,072        2,551

  Investments and advances:
   Affiliated companies   92,682      111,510       92,100          767
   Securities investments
    and other          1,646,357    1,882,613    1,976,955       16,475
                       1,739,039    1,994,123    2,069,055       17,242

  Property, plant and equipment:
   Land                  192,294      188,365      188,856        1,574
   Buildings             866,642      872,228      878,242        7,318
   Machinery and
    equipment          2,129,989    2,054,219    2,084,805       17,373
   Construction in
    progress              55,034       60,383       67,062          559
   Less-Accumulated
    depreciation     (1,895,679)  (1,896,845)  (1,914,037)     (15,950)
                       1,348,280    1,278,350    1,304,928       10,874
  Other assets:
   Intangibles, net      241,145      258,624      256,118        2,134
   Goodwill              296,446      290,127      296,124        2,468
   Deferred insurance
    acquisition costs    314,775      327,869      331,738        2,765
   Deferred income taxes 123,230      328,091      233,036        1,942
   Other                 425,143      451,369      471,245        3,927
                       1,400,739    1,656,080    1,588,261       13,236
                     Y 8,057,955  Y 8,370,545  Y 8,612,975      $71,775

  LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
   Short-term
    borrowings          Y 49,318    Y 124,360    Y 260,451       $2,171
   Current portion of
    long-term debt       217,068       34,385       35,028          292
   Notes and accounts
    payable, trade       813,935      697,385      771,521        6,429
   Accounts payable,
    other and accrued
    expenses             770,370      864,188      803,178        6,693
   Accrued income and
    other taxes           74,106      109,199       77,057          642
   Deposits from
    customers in the
    banking business     144,861      248,721      284,669        2,372
   Other                 367,242      356,810      396,406        3,304
                       2,436,900    2,435,048    2,628,310       21,903

  Long-term liabilities:
   Long-term debt        830,097      807,439      806,606        6,722
   Accrued pension and
    severance costs      303,986      496,174      507,114        4,226
   Deferred income taxes 171,109      159,079       72,375          603
   Future insurance
    policy benefits
    and other          1,738,362    1,914,410    1,980,437       16,504
   Other                 242,692      255,478      269,913        2,249
                       3,286,246    3,632,580    3,636,445       30,304

  Minority interest in
   consolidated
   subsidiaries           22,437       22,022       19,082          159

  Stockholders' equity:
   Capital stock         476,131      476,278      476,591        3,972
   Additional paid-in
    capital              968,261      984,196      989,919        8,249
   Retained earnings   1,266,441    1,301,740    1,302,848       10,857
   Accumulated other
    comprehensive
    income             (390,835)    (471,978)    (430,851)      (3,591)
   Treasury stock,
    at cost              (7,626)      (9,341)      (9,369)         (78)
                       2,312,372    2,280,895    2,329,138       19,409
                     Y 8,057,955  Y 8,370,545  Y 8,612,975      $71,775



  Consolidated Statements of Cash Flows (Unaudited)

                              (Millions of yen, millions of U.S. dollars)
                                          Three months ended June 30
                                            2002      2003    2003
  Cash flows from operating activities:
   Net income                           Y 57,181   Y 1,121      $9
   Adjustments to reconcile
    net income to net cash provided
    by (used in) operating activities
     Depreciation and amortization,
      including amortization of deferred
      insurance acquisition costs         83,318    84,277     702
     Amortization of film costs           62,740    52,867     441
     Accrual for pension and severance
      costs, less payments                 7,408    10,115      84
     (Gain) loss on sale, disposal or
      impairment of assets, net            5,383    (5,375)    (45)
     Gain on sales of securities
      investments, net                   (68,366)   (8,526)    (71)
     Deferred income taxes                20,881    15,303     128
     Equity in net losses of affiliated
      companies, net of dividends          8,537     9,971      83
     Changes in assets and liabilities:
       (Increase) decrease in notes
        and accounts receivable, trade     5,410   (32,757)   (273)
       Increase in inventories          (120,380)  (84,739)   (706)
       Increase in film costs            (75,602)  (71,399)   (595)
       Increase in notes and accounts
        payable, trade                    60,400    70,057     584
       Decrease in accrued income and
        other taxes                      (33,592)  (39,789)   (332)
       Increase in future insurance
        policy benefits and other         57,944    66,027     550
       Increase in deferred insurance
        acquisition costs                (16,353)  (16,229)   (135)
       Increase in other current assets  (43,747)  (84,415)   (703)
       Decrease in other current
        liabilities                      (24,256)  (30,744)   (256)
     Other                                35,195    (7,917)    (66)
          Net cash provided by
           (used in) operating
           activities                     22,101   (72,152)   (601)

  Cash flows from investing activities:
   Payments for purchases of
    fixed assets                         (67,776)  (84,197)   (702)
   Proceeds from sales of
    fixed assets                           2,201    13,870     116
   Payments for investments and
    advances by financial service
    business                            (216,857) (254,879) (2,124)
   Payments for investments and
    advances (other than financial
    service business)                    (12,742)   (8,545)    (71)
   Proceeds from sales of securities
    investments, maturities of
    marketable securities and
    collections of advances by
    financial service business           101,213   194,804   1,623
   Proceeds from sales of securities
    investments, maturities of
    marketable securities and
    collections of advances
    (other than financial service
    business)                            112,990     6,941      58
   Increase in time deposits              (2,316)   (1,122)     (9)
   Cash assumed upon acquisition
    by stock exchange offering                --     3,634      30
          Net cash used in
           investing activities          (83,287) (129,494) (1,079)

  Cash flows from financing activities:
   Proceeds from issuance of
    long-term debt                         6,751     1,234      10
   Payments of long-term debt             (9,574)   (3,428)    (28)
   Increase (decrease) in
    short-term borrowings                (57,216)  129,641   1,080
   Increase in deposits from
    customers in the banking business     38,389    35,553     296
   Dividends paid                        (11,521)  (11,566)    (96)
   Other                                  (5,883)    1,048       9
          Net cash provided by
           (used in) financing
           activities                    (39,054)  152,482   1,271

  Effect of exchange rate changes
   on cash and cash equivalents          (22,583)     (194)     (2)

  Net decrease in cash and cash
   equivalents                          (122,823)  (49,358)   (411)
  Cash and cash equivalents at
   beginning of the year                 683,800   713,058   5,942

  Cash and cash equivalents at
   end of the first quarter             Y560,977  Y663,700  $5,531

  (Notes)
  1.  U.S. dollar amounts have been translated from yen, for convenience
      only, at the rate of Y120 = U.S.$1, the approximate Tokyo foreign
      exchange market rate as of June 30, 2003.

  2.  As of June 30, 2003, Sony had 1,043 consolidated subsidiaries.  It has
      applied the equity accounting method in respect to 82 affiliated
      companies.

  3.  Sony calculates and presents per share data separately for Sony's
      Common stock and for the subsidiary tracking stock which is linked to
      the economic value of Sony Communication Network Corporation, based on
      Statement of Financial Accounting Standards ("FAS") No.128, "Earnings
      per Share."  The holders of the tracking stock have the right to
      participate in earnings, together with Common stock holders.
      Accordingly, Sony calculates per share data by the "two-class" method
      based on FAS No.128.  Under this method, basic net income per share
      for each class of stock is calculated based on the earnings allocated
      to each class of stock for the applicable period, divided by the
      weighted-average number of outstanding shares in each class during the
      applicable period.  The earnings allocated to the subsidiary tracking
      stock are determined based on the subsidiary tracking stock holders'
      economic interest in the targeted subsidiary's earnings available for
      dividends or change in accumulated losses that are not including those
      of the targeted subsidiary's subsidiaries.  The earnings allocated to
      Common stock are calculated by subtracting the earnings allocated to
      the subsidiary tracking stock from Sony's net income for the period.

      Weighted-average shares used for computation of earnings per share of
      Common stock are shown in the chart below.  The dilutive effect in the
      weighted-average shares for the three months ended June 30, 2002 and
      2003 mainly resulted from convertible bonds.


       Weighted-average shares                   (Thousands of shares)
       Three months ended June 30
                                                           2002        2003
       Net income
         -  Basic                                       918,517     921,748
         -  Diluted                                     997,579     925,537

      Weighted-average shares used for computation of earnings per share of
      the subsidiary tracking stock for the three months ended June 30, 2002
      and 2003 are 3,072 thousand shares. There were no potentially dilutive
      securities or options granted for EPS of the subsidiary tracking
      stock.

  4.  Sony's comprehensive income is comprised of net income and other
      comprehensive income.  Other comprehensive income includes changes in
      unrealized gains or losses on securities, unrealized gains or losses
      on derivative instruments, minimum pension liabilities adjustments and
      foreign currency translation adjustments.  Net income, other
      comprehensive income (loss) and comprehensive income (loss) for the
      three months ended June 30, 2002 and 2003 were as follows;


                                 (Millions of yen, millions of U.S. dollars)

                                              Three months ended June 30
                                           2002     2003       2003
  Net income                          Y 57,181   Y 1,121         $9
  Other comprehensive income (loss)  (115,242)    41,127        343
    Unrealized gains (losses) on
     securities                          5,994    17,018        142
    Unrealized gains (losses) on
     derivative instruments                289       646          5
    Minimum pension liabilities
     adjustments                            --   (4,218)       (35)
    Foreign currency translation
     adjustments                     (121,525)    27,681        231
  Comprehensive income (loss)       Y (58,061)  Y 42,248       $352

  5.  On April 1, 2002, Sony adopted FAS No. 144, "Accounting for the
      Impairment or Disposal of Long-Lived Assets."  FAS No. 144 addresses
      financial accounting and reporting for the impairment or disposal of
      long-lived assets.  FAS No. 144 establishes a single accounting model
      for long-lived assets to be disposed of by sale and modifies the
      accounting and disclosure rules for discontinued operations.  The
      adoption of the provision of FAS No. 144 did not have a material
      impact on Sony's results of operations and financial position for the
      year ended March 31, 2003.

  6.  In April 2002, the Financial Accounting Standards Board ("FASB")
      issued FAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64,
      Amendment of FASB Statement No. 13, and Technical Corrections."  This
      statement rescinds certain authoritative pronouncements and amends,
      clarifies or describes the applicability of others, effective for
      fiscal years beginning or transactions occurring after May 15, 2002,
      with early adoption encouraged.  Sony elected early adoption of this
      statement retroactive to April 1, 2002.  The adoption of this
      statement did not have an impact on Sony's results of operations and
      financial position.

  7.  In June 2002, the FASB issued FAS No. 146, "Accounting for Costs
      Associated with Exit or Disposal Activities."  FAS No. 146 is
      effective for exit or disposal activities that are initiated after
      December 31, 2002.  FAS No. 146 addresses financial accounting and
      reporting for costs associated with exit or disposal activities.  Sony
      adopted FAS No. 146 on January 1, 2003.  The adoption of this
      statement did not have a material effect on Sony's results of
      operations and financial position.

  8.  In November 2002, the FASB issued FASB Interpretation ("FIN") No. 45,
      "Guarantor's Accounting and Disclosure Requirements for Guarantees,
      Including Indirect Guarantees of Indebtedness of Others, an
      interpretation of FASB Statements No. 5, 57, and 107 and rescission of
      FASB Interpretation No. 34."  The interpretation elaborates on
      the existing disclosure requirements for most guarantees.  It also
      clarifies that at the time a company issues a guarantee, the company
      must recognize an initial liability for the fair value of the
      obligations it assumes under the guarantee. The initial recognition
      and initial measurement provisions of FIN No. 45 are applicable on a
      prospective basis to guarantees issued or modified after December 31,
      2002.  The initial recognition and initial measurement provisions of
      FIN No. 45 did not have a material effect on Sony's results of
      operations and financial position as at and for the year ended
      March 31, 2003.

  9.  In December 2002, the FASB issued FAS No. 148, "Accounting for
      Stock-Based Compensation -- Transition and Disclosure -- an Amendment
      of FASB Statement No. 123."  FAS No. 148 amends FAS No. 123,
      "Accounting for Stock-Based Compensation," to provide alternative
      methods of transition for a voluntary change to the fair value based
      method of accounting for stock-based employee compensation.  FAS
      No. 148 also requires that disclosures of the pro forma effect of
      using the fair value method of accounting for stock-based employee
      compensation be displayed more prominently and in a tabular format.
      Sony adopted the disclosure-only requirements in accordance with FAS
      No. 148 for the year ended March 31, 2003.  Sony has accounted for its
      employee stock-based compensation in accordance with Accounting
      Principles Board Opinion No. 25, "Accounting for Stock Issued to
      Employees" and, therefore, the adoption of the provisions of FAS
      No. 148 did not have an impact on Sony's results of operations and
      financial position.

  10. In January 2003, the FASB issued FIN No. 46, "Consolidation of
      Variable Interest Entities -- an Interpretation of ARB No. 51."  This
      interpretation addresses consolidation by a primary beneficiary of a
      variable interest entity ("VIE").  FIN No. 46 is effective immediately
      for all new VIEs created or acquired after January 31, 2003.  For VIEs
      created or acquired prior to February 1, 2003, the provisions of FIN
      No. 46 become effective for Sony during the second quarter of the year
      ending March 31, 2004.  For VIEs acquired prior to February 1, 2003,
      any difference between the net amount added to the balance sheet and
      the amount of any previously recognized interest in the VIE will be
      recognized as a cumulative effect of an accounting change.
      Sony continues to evaluate the impact of FIN No. 46 on Sony's results
      of operations and financial position.  However, Sony has identified
      potential VIEs created prior to February 1, 2003, which may be
      consolidated upon the adoption of FIN No. 46.  If these potential VIEs
      are consolidated, Sony would record a charge of approximately
      Yen 1,800 million ($15 million) as a cumulative effect of accounting
      change and an increase in assets and liabilities of approximately
      Yen 100,626 million ($839 million).  Sony did not enter into any new
      arrangements with VIEs on or after February 1, 2003.

  11. Effective with the first quarter ended June 30, 2003, "(Gain) loss on
      sale, disposal or impairment of assets, net" which was previously
      included in "Selling, general and administrative" is disclosed
      separately in "Costs and expenses." Such amounts for the three months
      ended June 30, 2002 have been reclassified to conform to the
      presentation for this year.

  12. Adoption of New Accounting Standards

      Accounting for Asset Retirement Obligations
      In June 2001, the FASB issued FAS No. 143, "Accounting for Asset
      Retirement Obligations."  This statement addresses financial
      accounting and reporting for obligations associated with the
      retirement of tangible long-lived assets and the associated asset
      retirement costs.  Sony adopted FAS No. 143 on April 1, 2003.  The
      adoption of FAS No. 143 did not have a material impact on Sony's
      results of operations and financial position.

      Accounting for Certain Financial Instruments with Characteristics of
       both Liabilities and Equity
      In May 2003, the FASB issued FAS No. 150, "Accounting for Certain
      Financial Instruments with Characteristics of both Liabilities and
      Equity."  FAS No. 150 establishes standards for how certain financial
      instruments with characteristics of both liabilities and equity shall
      be classified and measured.  This statement is effective for financial
      instruments entered into or modified after May 31, 2003, and otherwise
      is effective at the beginning of the first interim period beginning
      after June 15, 2003.  Sony adopted FAS No. 150 during the first
      quarter of the year ending March 31, 2004.  The adoption of FAS
      No. 150 did not have an impact on Sony's results of operations and
      financial position.

  Other Consolidated Financial Data
                               (Millions of yen, millions of U.S. dollars)
                                      Three months ended June 30
                                    2002      2003  Change    2003
  Capital expenditures
   (additions to property,
   plant and equipment)         Y 60,672  Y 81,017  33.5%    $675
  Depreciation and
   amortization expenses*         83,318    84,277    1.2     702
  (Depreciation expenses
   for property, plant and
   equipment                      67,051    65,636   -2.1    547)
  R&D expenses                    97,895   114,164   16.6     951

  *  Including amortization expenses for intangible assets and for
     deferred insurance acquisition costs


  Condensed Financial Services Financial Statements (Unaudited)

The results of the Financial Services segment are included in Sony's consolidated financial statements. The following schedules shows unaudited condensed financial statements for the Financial Services segment and all other segments excluding Financial Services. These presentations are not required under U.S. GAAP, which is used in Sony's consolidated financial statements. However, because the Financial Services segment is different in nature from Sony's other segments, Sony believes that a comparative presentation may be useful in understanding and analyzing Sony's consolidated financial statements.

Transactions between the Financial Services segment and Sony without Financial Services are eliminated in the consolidated figures shown below.

  Condensed Statements of Income

  Financial Services

                     (Millions of yen, millions of U.S. dollars)
                                  Three months ended June 30
                            2002         2003       Change         2003
                                                         %
  Financial service
   revenue             Y 128,710    Y 149,647         16.3       $1,247
  Financial service
   expenses              117,882      135,600         15.0        1,130
  Operating income        10,828       14,047         29.7          117
  Other income
   (expenses), net         (497)           14           --            0
  Income before income
   taxes                  10,331       14,061         36.1          117
  Income taxes and other   4,645        7,058         51.9           59
  Net income             Y 5,686      Y 7,003         23.2          $58


  Sony without Financial Services

                            (Millions of yen, millions of U.S. dollars)
                                    Three months ended June 30
                            2002         2003       Change         2003
                                                         %
  Net sales and
   operating revenue Y 1,602,111  Y 1,462,818         -8.7      $12,190
  Costs and expenses   1,560,870    1,459,962         -6.5       12,166
  Operating income        41,241        2,856        -93.1           24
  Other income
   (expenses), net        70,071       18,855        -73.1          157
  Income before income
   taxes                 111,312       21,711        -80.5          181
  Income taxes and
   other                  54,999       27,688        -49.7          231
  Net income (loss)     Y 56,313    Y (5,977)           --        $(50)


   Consolidated

                           (Millions of yen, millions of U.S. dollars)
                                       Three months ended June 30
                            2002         2003       Change         2003
                                                         %
  Financial service
   revenue             Y 121,891    Y 142,969         17.3       $1,191
  Net sales and operating
   revenue             1,599,915    1,460,811         -8.7       12,174
                       1,721,806    1,603,780         -6.9       13,365
  Costs and expenses   1,669,936    1,587,108         -5.0       13,226
  Operating income        51,870       16,672        -67.9          139
  Other income
   (expenses), net        64,773       19,099        -70.5          159
  Income before
   income taxes          116,643       35,771        -69.3          298
  Income taxes and
   other                  59,462       34,650        -41.7          289
  Net income             Y57,181       Y1,121        -98.0           $9


  Condensed Balance Sheets

  Financial Services

                             (Millions of yen, millions of U.S. dollars)
                         June 30     March 31      June 30      June 30
           ASSETS           2002         2003         2003         2003
  Current assets:
   Cash and cash
    equivalents        Y 285,322    Y 274,543    Y 305,833       $2,549
   Marketable
    securities           164,478      236,621      225,103        1,876
   Notes and accounts
    receivable, trade     74,683       68,188       77,545          646
   Other                  84,598      105,593      136,840        1,140
                         609,081      684,945      745,321        6,211

  Investments and
   advances            1,485,470    1,731,415    1,816,554       15,138

  Property, plant
   and equipment          48,054       45,990       44,840          374

  Other assets:
   Deferred insurance
    acquisition costs    314,775      327,869      331,738        2,765
   Other                 123,727      106,900      108,860          906
                         438,502      434,769      440,598        3,671
                     Y 2,581,107  Y 2,897,119  Y 3,047,313      $25,394

  LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
   Short-term
    borrowings          Y 50,307     Y 72,753     Y 68,285         $569
   Notes and accounts
    payable, trade         5,633        5,417        6,383           54
   Deposits from
    customers in the
    banking business     144,861      248,721      284,669        2,372
   Other                  78,344       88,986      100,206          835
                         279,145      415,877      459,543        3,830

  Long-term liabilities:
   Long-term debt        135,764      140,908      140,262        1,169
   Accrued pension and
    severance costs        7,905        8,737        9,097           75
   Future insurance
    policy benefits and
    other              1,738,362    1,914,410    1,980,437       16,504
   Other                 106,453      104,421      116,161          968
                       1,988,484    2,168,476    2,245,957       18,716

  Stockholders' equity   313,478      312,766      341,813        2,848
                     Y 2,581,107  Y 2,897,119  Y 3,047,313      $25,394

   Sony without Financial Services

                                 (Millions of yen, millions of U.S. dollars)

                         June 30     March 31      June 30      June 30
         ASSETS             2002         2003         2003         2003
  Current assets:
   Cash and cash
    equivalents        Y 275,655    Y 438,515    Y 357,867       $2,982
   Marketable securities   4,582        4,898        4,925           41
   Notes and accounts
    receivable, trade  1,091,550      943,073      976,757        8,139
   Other               1,342,711    1,117,454    1,288,524       10,738
                       2,714,498    2,503,940    2,628,073       21,900


  Film costs             292,944      287,778      306,072        2,551
  Investments and
   advances              363,764      383,004      372,682        3,106
  Investments in
   Financial Services,
   at cost               166,905      166,905      176,905        1,474
  Property, plant and
   equipment           1,300,225    1,232,359    1,260,087       10,501
  Other assets           997,616    1,251,810    1,261,742       10,514
                     Y 5,835,952  Y 5,825,796  Y 6,005,561      $50,046

  LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
   Short-term
    borrowings         Y 249,479    Y 126,687    Y 260,389       $2,170
   Notes and accounts
    payable, trade       809,618      693,589      766,841        6,390
   Other               1,145,232    1,245,578    1,182,370        9,853
                       2,204,329    2,065,854    2,209,600       18,413

  Long-term liabilities:
   Long-term debt        805,069      802,911      802,706        6,689
   Accrued pension and
    severance costs      296,081      487,437      498,017        4,150
   Other                 339,837      310,136      309,526        2,580
                       1,440,987    1,600,484    1,610,249       13,419

  Minority interest in
   consolidated
   subsidiaries           16,039       16,288       13,390          111

  Stockholders'
   equity              2,174,597    2,143,170    2,172,322       18,103
                     Y 5,835,952  Y 5,825,796  Y 6,005,561      $50,046


  Consolidated
                                (Millions of yen, millions of U.S. dollars)
                         June 30     March 31      June 30      June 30
           ASSETS           2002         2003         2003         2003
  Current assets:
   Cash and cash
    equivalents        Y 560,977    Y 713,058    Y 663,700       $5,531
   Marketable
    securities           169,060      241,520      230,028        1,917
   Notes and accounts
    receivable, trade  1,162,909    1,007,395    1,051,088        8,759
   Other               1,384,007    1,192,241    1,399,843       11,665
                       3,276,953    3,154,214    3,344,659       27,872

  Film costs             292,944      287,778      306,072        2,551

  Investments and
   advances            1,739,039    1,994,123    2,069,055       17,242

  Property, plant and
   equipment           1,348,280    1,278,350    1,304,928       10,874

  Other assets:
   Deferred insurance
    acquisition costs    314,775      327,869      331,738        2,765
   Other               1,085,964    1,328,211    1,256,523       10,471
                       1,400,739    1,656,080    1,588,261       13,236
                     Y 8,057,955  Y 8,370,545  Y 8,612,975      $71,775

  LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
   Short-term
    borrowings         Y 266,386    Y 158,745    Y 295,479       $2,463
   Notes and accounts
    payable, trade       813,935      697,385      771,521        6,429
   Deposits from
    customers in the
    banking business     144,861      248,721      284,669        2,372
   Other               1,211,718    1,330,197    1,276,641       10,639
                       2,436,900    2,435,048    2,628,310       21,903

  Long-term liabilities:
   Long-term debt        830,097      807,439      806,606        6,722
   Accrued pension and
    severance costs      303,986      496,174      507,114        4,226
   Future insurance
    policy benefits and
    other              1,738,362    1,914,410    1,980,437       16,504
   Other                 413,801      414,557      342,288        2,852
                       3,286,246    3,632,580    3,636,445       30,304

  Minority interest
   in consolidated
   subsidiaries           22,437       22,022       19,082          159

  Stockholders'
   equity              2,312,372    2,280,895    2,329,138       19,409
                     Y 8,057,955  Y 8,370,545  Y 8,612,975      $71,775


   Condensed Statements of Cash Flows

   Financial Services

                                 (Millions of yen, millions of U.S. dollars)
                                          Three months ended June 30
                                     2002            2003          2003

  Net cash provided by
   operating activities          Y 61,281        Y 66,074          $551
  Net cash used in investing
   activities                   (125,196)        (76,094)         (634)
  Net cash provided by
   financing activities            22,002          41,310           344
  Net increase (decrease)
   in cash and cash equivalents  (41,913)          31,290           261
  Cash and cash equivalents
   at beginning of the year       327,235         274,543         2,288
  Cash and cash equivalents
   at end of the first quarter  Y 285,322       Y 305,833        $2,549


  Sony without Financial Services

                                (Millions of yen, millions of U.S. dollars)
                                           Three months ended June 30
                                     2002            2003          2003

  Net cash used in
   operating activities        Y (39,040)     Y (138,365)      $(1,153)
  Net cash provided by
   (used in) investing
   activities                      51,260        (55,744)         (464)
  Net cash provided by
   (used in) financing
   activities                    (70,547)         113,655           947
  Effect of exchange rate
   changes on cash and cash
   equivalents                   (22,583)           (194)           (2)
  Net decrease in cash and
   cash equivalents              (80,910)        (80,648)         (672)
  Cash and cash equivalents
   at beginning of the year       356,565         438,515         3,654
  Cash and cash equivalents
   at end of the first quarter  Y 275,655       Y 357,867        $2,982


  Consolidated
                                (Millions of yen, millions of U.S. dollars)
                                          Three months ended June 30
                                     2002            2003          2003

  Net cash provided by
   (used in) operating
   activities                    Y 22,101      Y (72,152)        $(601)
  Net cash used in investing
   activities                    (83,287)       (129,494)       (1,079)
  Net cash provided by
   (used in) financing
   activities                    (39,054)         152,482         1,271
  Effect of exchange rate
   changes on cash and
   cash equivalents              (22,583)           (194)           (2)
  Net decrease in cash and
   cash equivalents             (122,823)        (49,358)         (411)
  Cash and cash equivalents
   at beginning of the year       683,800         713,058         5,942
  Cash and cash equivalents
   at end of the first quarter  Y 560,977       Y 663,700        $5,531

SOURCE: Sony Corporation

CONTACT: Investor Relations, Tokyo, Yukio Ozawa, +81-3-5448-2180, or
New York, Yas Hasegawa or Kumiko Koyama, +1-212-833-6722, or London, Chris
Hohman or Shinji Tomita, +44-20-7444-9713, all of Sony Corporation

Web site: http://www.sony.com/
http://www.sony.net/IR