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Sony will probably meet forecast for this year's profits

Sony Corp.'s president said the world's No. 2 consumer-electronics maker will probably meet its ?150 billion (US$1.23 billion) full-year profit forecast, aided by sales of televisions and DVD players in the US.

"We have no plan to revise our full-year earnings target," Kunitake Ando said during an interview in Chiba Prefecture east of Tokyo where he was attending a consumer-electronics show. "It was a conservative target to begin with."

Sony is sticking to its forecasts because the performance of its audio-visual business is offsetting a slowdown at its personal-computer business, Ando said. Electronics accounted for almost 95 percent of Sony's second-quarter operating profit.

A weaker Japanese currency is also helping, Ando said. For the three months ended yesterday, the yen weakened 1.8 percent against the US dollar. Sony executives had voiced concern earlier this year that a stronger yen would eat into profits.

Sony is counting on US demand to bring a prolonged earnings decline to an end. Net income last fiscal year was ?15.3 billion, 8.6 percent less than the previous year. Net income has been sliding for four years.

Still, investors say they have lingering concerns about Sony, which relies on overseas sales for about 70 percent of its overall revenue. Ando shares some doubts, saying Sony is "not optimistic at all" about the outlook for the US holiday season.

"Sony may not be as powerful a presence in the consumer-electronics industry as it once was," said Makoto Suzuki, who manages ?15 billion at Chuo Mitsui Asset Management Co. "The Koreans' ability to catch up has been dramatic. Samsung Electronics is the industry's most vigorous company now."

In the three months ended June 30, Sony posted sales of ?558.2 billion in the US, about one third of its total sales in the quarter.
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