Sony shares tumble on fears of big loss
Sony shares today plunged on reports that the electronics giant is set to post its first annual operating loss in 14 years because of a slump in demand and a strong yen.business Updated: Jan 13, 2009 17:10 IST
Sony shares on Tuesday plunged on reports that the electronics giant is set to post its first annual operating loss in 14 years because of a slump in demand and a strong yen.
Sony, a bellwether of corporate Japan, is expected to post an operating loss of 100 billion yen (USD 1.12 billion) for the financial year to March 2009, the Nikkei business daily reported.
Weak sales during the crucial year-end holiday season may even saddle the firm with an operating loss of as much as 200 billion yen, the Nikkei said, citing unnamed company sources.
In a brief statement in response to the report, Sony said it had "made no announcement in this regard and at this time has no further comment."
Sony shares slumped 8.9 per cent to 2,000 yen by the close, contributing to a 4.79 per cent drop in the benchmark Nikkei-225 stock index.
"Poor demand in the US and Europe, as well as the yen's surge, have had a huge impact on the company," said Daiwa Institute of Research analyst Kazuharu Miura, who expects Sony to lose 110 billion yen this financial year.
Sony has been particularly hard hit by the current economic downturn because it was already burdened with large restructuring costs, while turmoil on global markets has hit the company's financial arm, Miura said.
The company, struggling to keep up with rivals such as Apple and Nintendo, has issued two profit warnings since last July.