Japanese electronics giant Sony Corp slashed its fiscal year profit forecasts yesterday because of costs from a massive global recall of laptop batteries and price cuts in Japan for the next-generation PlayStation 3 video game console.
Sony now expects group net profit of ¥80 billion (US$673 million), down 38 percent from the ¥130 billion it had forecast in July for the fiscal year ending March next year.
It left unchanged its fiscal year sales outlook at ¥8.23 trillion but lowered its operating profit 62 percent to ¥50 billion from the earlier forecast for ¥130 billion.
The Japanese electronics company said in a statement that in the July-September period it will rack up an extra cost of approximately ¥51 billion for the recalls of lithium-ion batteries for laptops announced by practically every major laptop maker in the world.
Sony had initially said the battery recalls will cost the company between ¥20 billion and ¥30 billion.
A price cut in Japan for the PlayStation 3 console, set to go on sale next month, will decrease earnings for the video game sector, it said.
The production delays for the console, which forced Sony to delay the product in Europe until next March, will also be costly, Sony said.
Sales and profits for the handheld PlayStation Portable have also been lagging and will push down results, the statement said.
But Sony said despite such setbacks, it is still on its way to a turnaround in its core electronics business because of hit products such as the Bravia range of liquid-crystal-display TVs and its extremely popular digital camera range.
Sony shares, which have fallen back after gaining 50 percent earlier this year, slipped 0.4 percent in Tokyo to close at ¥4,790. The forecast revision was announced just after the market closed.