Sony recalls 1.6 million Bravia TVs

Bloomberg

Thu, Oct 13, 2011 - Page 11

Sony Corp has recalled 1.6 million Bravia flat-panel TVs sold worldwide since 2007, because a faulty component could cause them to melt or catch fire.

Sony recalled the LCD TVs after an incident last month in which a customer noticed a small fire and smoke, said Yuki Shima, a Tokyo-based spokeswoman for the world’s No. 3 manufacturer of televisions. Eleven incidents have been recorded in Japan since 2008, according to a company statement and no injuries have been reported.

A faulty component in the backlight systems could be the source of overheating that can melt the top of the TV set, Shima said. It is the second recall involving Sony products in a month, with KDDI Corp, Japan’s second-largest mobile-phone operator, saying it would replace Sony-made batteries in as many as 2 million handsets because they could overheat and melt.

“Sony-related recalls are following one another and that could ruin the company’s brand image,” said Keita Wakabayashi, an analyst at Mito Securities Co. “Considering Sony’s overall business size, the TV recalls won’t shake the company’s grounding.”

The same transformer is used in the five Bravia models in Japan being recalled, according to a Sony statement.

The recalled sets will be repaired if a faulty part is found. Sony will dispatch a service crew to inspect the set and offer a rental TV while repairs are being made, Shima said. Sony would not offer refunds or replacement TVs, she said.

There have not been any reports of overheating incidents outside Japan, the statement said. The recalls were also scheduled to be announced yesterday in the US and Europe, Shima said.

The recall was announced after Tokyo markets closed. Sony rose 1.4 percent to close at ¥1,517. The stock has plummeted 48 percent this year, compared with a 16 percent decline for the broader TOPIX index.

“It could impact the stock negatively if the recall causes a significant amount of expense,” Wakabayashi said.

The repairs would have a negligible impact on Sony’s earnings, Shima said. The recall was voluntary, she said.

Sony shares fell to their lowest in 24 years earlier this month on speculation that the yen’s strength and slumping demand for televisions would hurt earnings. The company, which forecast full-year operating profit of ¥200 billion (US$2.6 billion) in July, loses about ¥6 billion in annual operating profit, or sales minus the cost of goods sold and administrative expenses, for every ¥1 decline against the euro.

It is the company’s first recall of flat-screen televisions, though not the first associated with the Bravia line. In April last year, Sony offered to repair the stands attached to two models because the screws were not strong enough.

Later that month, the company recalled 535,000 Vaio personal computers because of possible overheating from a temperature control defect.