Sony cuts forecasts on currency, sales decline

[October 23, 2008]  TOKYO (AP) -- Sony Corp. drastically lowered profit and sales forecasts for the fiscal year Thursday, 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 March 2009 are set to plunge 59 percent from the previous year.

Tokyo-based Sony now expects a 150 billion yen ($1.5 billion) profit for the year ending March 2009, 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 yen ($2.4 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 yen, but changed that expectation to 100 yen.

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

The financial credit crisis and accompanying global economic slowdown is expected to weigh on exporters like Sony, which rakes in more than half its sales in North America and Europe.

Sony, due to announce quarterly earnings next Wednesday, also lowered its sales forecast for the fiscal year to 9 trillion yen ($92 billion) from the previous 9.2 trillion yen ($94.3 billion), 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 yen ($215.2 million) profit for the July-September period, down 72 percent from 73.7 billion yen for the same period last year. Sales are expected to inch down 1 percent year on year to 2.07 trillion yen ($21.2 billion), it said.

[Associated Press; By YURI KAGEYAMA]

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