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Analysts Predict 50 Percent Profit Fall For Sony

A median estimate from five analysts surveyed by news agency Bloomberg has predicted that Sony’s third quarter results could see profits fall by a half, due to slower than expected sales of its flagship PlayStation 3 next-gen console.
A median estimate from five analysts surveyed by news agency Bloomberg has predicted that Sony’s third quarter results could see profits fall by a half, due to slower than expected sales of its flagship PlayStation 3 next-gen console. Further predictions earlier in the month from Japanese analyst group Nomura Securities suggested that Sony will only reach 75 percent of its fiscal year sales target for PlayStation 3 consoles, with estimated sales up to the end of March 2007 being cut from 6 million to 4.5 million by the group. The new estimates suggest that the company will see group income fall to ¥84.1 billion ($689m) for the three months ended December 31st. Sales for the games division alone are estimated at ¥390 billion ($3.20bn), with operating results predicted at a loss of ¥50.9 billion ($417m). The "unexpected" success of the Wii, rather than direct competition from the Xbox 360, is cited as the major reason for the shortfall. However, the group as a whole may still exceed its full year profit targets thanks to a weak yen, good sales of the Bravia range of high end televisions, and growth in the company’s movie division. The analysts predict that Sony’s game division will lose as much as ¥191.9 billion ($1.57bn) for the full fiscal year, compared to a profit of ¥8.7 billion ($71m) the year before. The company’s official fiscal results for the third quarter are expected to be released later this week.

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