Yahoo!  My Yahoo!  Mail
				News Home - Help

News Home Top Stories World Asia Pacific Business Technology Entertainment Sports Photos -- News by Country -- Indonesia Malaysia Philippines Singapore Thailand -- Greater Asia -- China Hong Kong Taiwan
	Yahoo! Asia News Search Yahoo! News

		advertisement
Thursday January 31, 8:12 PM Sony profit up, cuts forecast TOKYO (Reuters) - Sony Corp , maker of PlayStation game gear and Vaio PCs, posted a small rise in quarterly operating profit and cut its outlook as weaker markets ate into its investments and a firmer yen hurt overseas sales. Arch rival Matsushita Electric Industrial Co Ltd , the world's largest plasma TV maker, fared better, posting a 22 percent gain in quarterly profit and indicated it could beat its own annual forecast, although a slowing U.S. economy poses a big risk for both firms. Sony enjoyed robust holiday demand for its Cyber-shot digital cameras and Handycam camcorders and managed to return its game division to profit by cutting PlayStation 3 production costs and boosting sales of its portable game machine. But it lowered its operating profit forecast for the year to March to 410 billion yen ($3.86 billion) from 450 billion yen, citing the rising yen and the falling stock market, which has cut into the value of investments held by its life insurance unit. The new forecast falls well short of the market consensus of 446.9 billion yen in a poll of 22 analysts by Reuters Estimates. "The game division turning into the black is a positive," said Takeshi Osawa, a senior fund manager at Norinchukin Zenkyoren Asset Management. "But the U.S. economic outlook is a cause of concern for its consumer electronics business. And compared with Sony, Matsushita looks more solid and stable." MARGIN TARGET Sony now expects an operating profit margin of 4.6 percent this business year, missing its target of 5 percent. The margin target has been the most visible indicator of success for Sony's turnaround efforts led by Chief Executive Howard Stringer. Sony, which vies with Samsung Electronics Co Ltd and Sharp Corp in flat TVs, has shed 10,000 jobs and a wide range of non-core assets over the past few years. But tumbling prices of LCD TVs and other key products have cut into its earnings. Sony's core electronics division saw its operating income fall 7 percent in the October-December quarter, also hurt by lower sales of semiconductors to the game division. Sony said it was worried that demand in the United States could be hit by the effects of the subprime mortgage loan crisis. "We have seen no sign of demand weakening in the U.S. due to the subprime loan problems, but we expect there to be a gradual impact from here on," Sony Chief Financial Officer Nobuyuki Oneda told a news conference. Sony's operating profit for October-December came to 189.36 billion yen, up 5.9 percent from 178.91 billion yen in the same quarter a year earlier, though far below the average estimate of 245.5 billion yen from four analysts. Net profit rose 25 percent to 200.22 billion yen, its highest quarterly profit ever. Sony raised its PlayStation Portable sales estimate by 30 percent to 13 million for the year to March, while cutting its PS3 sales target by 14 percent to 9.5 million units. Rival Nintendo Co Ltd aims to sell 18.5 million units of the Wii console during the same period, or twice as many as the PS3's estimated sales. RECORD PROFIT Panasonic maker Matsushita, meanwhile, said its operating profit came to a record 165.4 billion yen in October-December, up from 135.83 billion yen a year earlier, helped by brisk demand for its Lumix digital cameras and Viera flat televisions. Matsushita will change its name to Panasonic Corp on October 1. It left unchanged its forecast for operating profit to rise 4 percent to 477 billion yen in the full year to March. That is below the consensus of 493.8 billion yen in a poll of 20 analysts by Reuters Estimates. "The announced number for operating profit is the least we are likely to be achieving. We are now trying to reach our in-house target of 500 billion yen," Matsushita director Makoto Uenoyama told a news conference. Prior to the announcement, shares in Sony closed up 3.6 percent at 5,220 yen, outperforming the Tokyo stock market's electrical machinery index , which rose 2.7 percent. Matsushita soared 8.7 percent to 2,250 yen ahead of its results. (Additional reporting by Noriyuki Hirata, Taiga Uranaka, Editing by Michael Watson and David Cowell)