July 26 (Bloomberg) -- Sony Corp., the maker of Cyber-shot cameras and PlayStation 3 consoles, said first-quarter profit doubled after the dollar's increase against the yen boosted overseas sales.

Net income rose to 66.5 billion yen ($552 million), or 63.14 yen a share, in the three months ended June 30, from 32.3 billion yen, or 30.75 yen, a year earlier, the Tokyo-based company said in a statement today. Sales gained 13 percent to 1.98 trillion yen, beating analysts' estimates.

The yen, the worst performer among the world's major currencies in the past year, increased the value of Sony's televisions and cameras sold outside of Japan, offsetting losses at the game division. Chief Executive Officer Howard Stringer, who projects the games unit will become profitable next fiscal year, may have to further cut prices of the PlayStation 3 to take market share from Nintendo Co.'s Wii.

``The results signal Sony's improving profitability at its digital camera business,'' said Masaki Iso, who oversees about $7.3 billion as head of Japanese equities at Yasuda Asset Management Co. in Tokyo. ``Solid global economic growth and a weaker yen also provided a tailwind.''

Sony, the world's second-largest maker of consumer electronics, kept its full-year earnings forecasts unchanged. Operating profit, or sales minus the cost of goods sold and administrative expenses, tripled to 99.3 billion yen from 27 billion yen a year earlier in the quarter. The weaker Japanese currency added 25.7 billion yen to operating income, Sony said.

The company was expected to report 32.8 billion yen in net income on sales of 1.85 trillion yen, according to the median estimate of four analysts surveyed by Bloomberg.

Share Reaction

Shares of Sony rose 8 yen to the equivalent of 6,342 yen as of 12:15 p.m. in Germany, from the close of 6,350 yen in Tokyo earlier today. The stock has gained 25 percent on the Tokyo Stock Exchange this year, compared with a 2.8 percent advance in the Nikkei 225 Stock Average.

Sony targets an operating profit margin of 5 percent this year to catch up with larger rival Matsushita Electric Industrial Co.'s 5.05 percent. In the past quarter, Sony had a margin of 5 percent, and 6 percent for consumer electronics alone.

Profit from consumer electronics rose 77 percent to 84.1 billion yen, while sales gained 12 percent to 1.43 trillion yen on demand for Handycam video cameras and Bravia televisions.

TV Loss

Chief Financial Officer Nobuyuki Oneda said today Sony's television business will post an operating loss this year. The division reported a 39 billion yen loss in the quarter just ended, compared with an 11 billion yen loss a year earlier.

``For the full year, it will be difficult to be profitable in the TV business,'' Oneda told reporters in Tokyo. He said industry prices for liquid-crystal display TVs fell as much as 35 percent in the quarter.

The loss at the PlayStation business widened to 29.2 billion yen, from 26.8 billion yen a year earlier, after the company's newest game console lost ground to the Wii. Sales at the games unit climbed 61 percent to 196.6 billion yen.

Sony, the world's biggest game-console maker, today forecast sales of the PlayStation 3 to reach 11 million units this fiscal year. Yesterday, Kyoto-based Nintendo increased its sales target for the Wii by 18 percent to 16.5 million units for the year ending March 31.

The PlayStation 3, introduced in late November, is outsold by the Wii 2 to 1 in the U.S. and 3 to 1 in Japan, according to estimates from Port Washington, New York-based NPD Group Inc. and Tokyo-based researcher Enterbrain Inc.

PlayStation Price Cut

Sony this month cut the price of the PlayStation 3 in the U.S. by $100 to $499. Two days later, Sony said it would discontinue making the model and sell an 80-gigabyte version for $599. The Wii sells for $250.

Sony still loses money on every PlayStation 3, which includes a high-definition Blu-ray DVD player, because of production costs, analysts said.

At the movie division, sales rose by 13 percent to 231.4 billion yen, generating 3.3 billion yen in operating profit.

In May, Sony released ``Spider-Man 3,'' setting a three-day box-office record at U.S. and Canadian theaters and taking in $148 million for Sony, according to box-office tracker Media By Numbers LLC.

The financial unit had a 49 percent gain in sales to 184.8 billion yen, boosted by Sony Life Insurance. Operating profit surged to 33.8 billion yen from 4.6 billion yen a year earlier.

The yen averaged 120.50 to the dollar in the quarter, weakening from 116.11 a year earlier, according to data compiled by Bloomberg. Against the euro, the Japanese currency traded at an average 162.08, compared with 144.56 a year earlier.

To contact the reporter on this story: Hiroshi Suzuki in Tokyo at Hsuzuki5@bloomberg.net

Last Updated: July 26, 2007 06:25 EDT