Sony Q2 profit plunges 90% on yen, weak sales
Thursday, October 30, 2008
JAPAN'S Sony Corp posted a 90 per cent fall in quarterly profit as growing worries about the global economy sent the yen higher and hit camera sales, and the company kept its annual profit outlook of a 58 per cent decline.
The steep profit slide was expected after the electronics and entertainment conglomerate last week cut its annual operating profit forecast by 57 per cent, citing yen strength and slower digital camera and flat TV demand.
Canon Inc this week followed Sony in cutting its full-year outlook, although Panasonic Corp on Tuesday bucked the trend and kept its annual outlook of 8 per cent profit growth despite the tough business environment.
Sony, which competes with Canon in digital cameras and with Samsung Electronics Co in LCD TVs, reaffirmed an operating profit forecast it issued last Thursday of ¥200 billion (US$2.02 billion) for the year to March, down from ¥475.3 billion a year earlier.
Some industry watchers, however, expect the maker of Bravia flat TVs and Cyber-shot digital cameras to post an even lower profit for the current business year as the latest outlook is based on what they consider rather optimistic assumptions.
Analysts polled by Reuters Estimates on average predict an annual operating profit of ¥158.2 billion.
Sony's latest outlook is based on a euro/yen exchange rate assumption of ¥140 for the second half of the year to March and on the premise that Tokyo stock levels remain unchanged from Sept 30 for the last six months of the business year.
The euro traded around ¥123 yesterday, while the Nikkei has lost about a quarter of its value so far this month.
Operating profit totalled ¥11.05 billion in July-September, down from ¥111.62 billion a year earlier.
Net profit fell 72 per cent to ¥20.8 billion on sales of ¥2.07 trillion, down 0.5 per cent.
Prior to the announcement, shares in Sony closed up 2 per cent at ¥2,035, underperforming the Tokyo stock market's electrical machinery index IELEC, which rose 6.7 per cent. Sony shares have lost 68 per cent since the start of the year through Tuesday, while the subindex slid 56 per cent.
Reuters
The steep profit slide was expected after the electronics and entertainment conglomerate last week cut its annual operating profit forecast by 57 per cent, citing yen strength and slower digital camera and flat TV demand.
Canon Inc this week followed Sony in cutting its full-year outlook, although Panasonic Corp on Tuesday bucked the trend and kept its annual outlook of 8 per cent profit growth despite the tough business environment.
Sony, which competes with Canon in digital cameras and with Samsung Electronics Co in LCD TVs, reaffirmed an operating profit forecast it issued last Thursday of ¥200 billion (US$2.02 billion) for the year to March, down from ¥475.3 billion a year earlier.
Some industry watchers, however, expect the maker of Bravia flat TVs and Cyber-shot digital cameras to post an even lower profit for the current business year as the latest outlook is based on what they consider rather optimistic assumptions.
Analysts polled by Reuters Estimates on average predict an annual operating profit of ¥158.2 billion.
Sony's latest outlook is based on a euro/yen exchange rate assumption of ¥140 for the second half of the year to March and on the premise that Tokyo stock levels remain unchanged from Sept 30 for the last six months of the business year.
The euro traded around ¥123 yesterday, while the Nikkei has lost about a quarter of its value so far this month.
Operating profit totalled ¥11.05 billion in July-September, down from ¥111.62 billion a year earlier.
Net profit fell 72 per cent to ¥20.8 billion on sales of ¥2.07 trillion, down 0.5 per cent.
Prior to the announcement, shares in Sony closed up 2 per cent at ¥2,035, underperforming the Tokyo stock market's electrical machinery index IELEC, which rose 6.7 per cent. Sony shares have lost 68 per cent since the start of the year through Tuesday, while the subindex slid 56 per cent.
Reuters
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