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Fri, Oct 24, 2008 - Page 10 News List

Sony cuts forecast for 2008 on sales, currency decline

AP AND BLOOMBERG , TOKYO

Sony Corp drastically lowered profit and sales forecasts for the current fiscal year yesterday, blaming deteriorating sales of flat-panel TVs and other gadgets battered by a global slowdown.

The latest numbers would mean that Sony’s profit for the fiscal year ending next March are set to plunge 59 percent from the previous year.

Tokyo-based Sony now expects a ¥150 billion (US$1.5 billion) profit for the year ending in March, and it gave the unfavorable currency rate as another big reason for the faltering results.

Back in July, Sony had expected to post ¥240 billion in profit for the fiscal year.

Sony, which makes the Walkman portable music player and PlayStation 3 game console, had counted on the dollar trading at about ¥105, but changed that expectation to ¥100.

Fears have been growing about the earnings of major Japanese companies scheduled to announce results in the next few weeks.

The benchmark for the Tokyo stock market lost 2.5 percent yesterday because of such worries.

The financial credit crisis, which began in the US, is expected to weigh on exporters like Sony, which rakes in more than half its sales in North America and Europe.

“Consumer spending will likely slow significantly across the globe and the stronger yen will weigh on company earnings,” said Yoji Takeda, who helps manage US$1.1 billion at RBC Investment (Asia) Ltd in Hong Kong. “The impact on Japanese exporters is substantial.’’

Sony also lowered its sales forecast for the year to ¥9 trillion from the previous ¥9.2 trillion, although that marks a 1 percent improvement from the previous fiscal year.

Sony said in a statement that it expects lower profits in its electronics business because of falling sales of liquid-crystal- display TVs, digital cameras and video camcorders.

Price drops from intense competition also hurt the numbers, Sony said.

The plunge on the Japanese stock market has also eroded the gains Sony is getting from equity and bond investments, the company said. But Sony said results are in line with previous expectations in its gaming and movies division.

Sony said it expects to post a ¥21 billion profit for the July to September period, down 72 percent from ¥73.7 billion for the same period last year. Sales are expected to inch down 1 percent year on year to ¥2.07 trillion, it said.

Sony is to release second quarter earnings next week.

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