OREANDA-NEWS. Sony Corporation announced its consolidated financial results for the second quarter ended September 30, 2013 (July 1, 2013 to September 30, 2013).

Sales and operating revenue ("sales") were 1,775.5 billion yen (18,117 million U.S. dollars), an increase of 10.6% compared to the same period of the previous fiscal year ("year-on-year"). This increase was primarily due to the favorable impact of foreign exchange rates and a significant increase in sales of smartphones, partially offset by the absence of sales from the chemical products related business which was sold in September 2012, as well as a decrease in sales of video cameras and compact digital cameras. On a constant currency basis, sales decreased 9% year-on-year. For further details about sales on a constant currency basis, see Note on page 9.

Operating income decreased 15.5 billion yen year-on-year to 14.8 billion yen (151 million U.S. dollars). This significant decrease was primarily due to a significant decline in operating results in the Pictures segment, partially offset by a significant improvement in the Mobile Products & Communications ("MP&C") segment, reflecting strong smartphone sales, and the favorable impact of foreign exchange rates.

Operating income during the current quarter includes a gain of 12.8 billion yen (131 million U.S. dollars) from the sale of certain shares of M3, Inc. ("M3") in All Other. The current quarter's results include a net benefit of 4.8 billion yen (49 million U.S. dollars) from insurance recoveries related to damages and losses incurred from the floods in Thailand in the fiscal year ended March 31, 2012 (the "Floods"). In the same quarter of the previous fiscal year, a net benefit of 13.2 billion yen from the a bove-mentioned insurance recoveries, and a gain of 8.2 billion yen from the sale of the chemical products related business were recorded.

During the current quarter, restructuring charges, net, decreased 3.7 billion yen year-on-year to 7.8 billion yen (80 million U.S. dollars).

Equity in net loss of affiliated companies, recorded within operating income, decreased 1.1 billion yen year-on-year to 2.0 billion yen (21 million U.S. dollars).

The net effect of other income and expenses was an expense of 8.8 billion yen (90 million U.S. dollars), an improvement of 1.8 billion yen year-on-year.

Income before income taxes decreased 13.7 billion yen year-on-year to 6.0 billion yen (61 million U.S. dollars). During the current quarter, Sony recorded 11.6 billion yen (119 million U.S. dollars) of income tax expense. As of March 31, 2013, Sony had established a valuation allowance against certain deferred tax assets for Sony Corporation and its national tax filing group in Japan, the consolidated tax filing group in the U.S., and certain other subsidiaries.

During the current fiscal year, certain of these tax filing groups and subsidiaries incurred losses, and as a result Sony continued to not recognize the associated tax benefits. As a result, Sony's effective tax rate for the current quarter exceeded the Japanese statutory tax rate.

Net loss attributable to Sony Corporation's stockholders, which excludes net income attributable to noncontrolling interests, increased 3.8 billion yen year-on-year to 19.3 billion yen (197 million U.S. dollars.