Sony Corp, the second-largest consumer-electronics maker, had a loss in the first quarter as its electronics, movies and video-game businesses slumped. The company cut its full-year profit forecast 40 percent and plans to reduce spending.
Sony's group loss was ?30.1 billion (US$244 million), or ?32.75 a share, in the three months ended June 30. The company had an ?88.3 billion loss in the first quarter last year when it took a charge related to a US accounting rule change.
Tokyo-based Sony's consumer-electronics, video-game and movie divisions all had operating losses with the music and finance units posting a profit.
Though losses at its game business narrowed, the division is unprofitable because of start-up costs associated with the PlayStation2 console and flagging software sales.
"I'm greatly concerned about earnings at Sony's game division because that's the center of Sony's plan for long-term growth," said Kazue Yanagisawa, a fund manager at AXA Investment Managers Tokyo Ltd, who helps manage US$4.2 billion.
The company said full-year profit will total ?90 billion, lagging its earlier forecast of ?150 billion made in April.
Sony will cut spending 25 percent from earlier plans, with the biggest reduction in its electronics division.
The company will cut spending at its electronics business to ?250 billion, down 12 percent from earlier plans.
``Recovery in the electronics industry this year is difficult,'' said Sony Chief Financial Officer Teruhisa Tokunaka, adding first-quarter earnings were worse than expected because of the loss at Sony's electronics business.
First-quarter sales rose 4.6 percent to ?1.64 trillion.
Sony took a charge of ?12 billion in the first quarter after cellular-phone operators NTT DoCoMo Inc and KDDI Corp recalled as many as 1.1 million Sony handsets because of faulty software. Sony is focusing on cellphones as its consumer-electronics and video-game divisions struggle.
The maker of the Trinitron television joins companies such as Compaq Computer Corp, which are suffering from slow demand for microchips, personal computers and cellular phones.
Last week, Microsoft Corp, the world's largest computer software maker, said it is likely to miss analysts' profit forecasts in the quarter ending Sept. 30 because a PC sales slump is eroding demand.
Market researcher Dataquest Inc said global PC sales in the quarter ended June 30 fell 1.9 percent from a year earlier, the first decline since 1986, when Apple Computer Inc and International Business Machines Corp were creating the industry.
"Consumer electronics and games are doing quite badly," said Kazunori Kumata, an analyst at Sakura Friend Research Center Ltd, who rates the company "underperform."
"Sony has to take it seriously."
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