Sony Q4 loss widens

  • Business
  • Thursday, 17 May 2007

TOKYO: Sony Corp reported a wider quarterly loss yesterday due to losses in its game unit, but it forecast a sharp rise in profit this year as it boosts sales of its PlayStation 3 video game machine and LCD TVs. 

The Japanese electronics and entertainment conglomerate was hit hard last year by massive costs to launch the PlayStation 3 (PS3) and recall 9.6 million units of its laptop PC batteries, which in rare cases could catch fire from overheating. 

But it is taking steps to cut production costs of the PS3 and is starting up an advanced liquid crystal display (LCD) panel plant with Samsung Electronics Co Ltd this year to make TVs more efficiently. 

Sony, locked in a battle with Microsoft Corp and Nintendo Co. Ltd. for dominance in the US$30bil video game industry, forecast an operating profit of 440 billion yen for the year to March 2008. 

The forecast represents a six-fold gain on 2006/07 and beats the consensus of 377.8 billion yen in a poll of 20 analysts by Reuters Estimates, though it includes 59 billion yen profit from a sale of land not likely reflected in the consensus. 

Sony Corp corporate executive officer, executive vice-president and chief financial officerNobuyuki Oneda (left) contemplates as he answers questions during the announcement of thefirm's results in Tokyo yesterday. Looking on is corporate executive and senior vice-presidentTakao Yuhara. – AP

Sony expects sales to grow 5.8% to 8.78 trillion yen. Analysts said Sony’s forecasts looked strong. 

“The forecast looks really good. It will be a matter of whether the company can actually achieve that goal,” said Tomomi Yamashita, senior fund manager at Shinkin Asset Management. “Investors think highly of Sony’s efforts to turn around its struggling electronics business. Now its game business is under-performing, and whether it can fix that, too, will be closely watched.” 

For January-March, the fourth quarter of the past business year, Sony booked an operating loss of 113.4 billion yen, against a loss of 51.9 billion yen a year earlier. – Reuters  

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