Sony Warns Of 59 Percent Profit Decline

A decline in overall sales and a strengthening yen have caused Sony to issue a profits warning for the current financial year. The company is now predicting a net profit of ¥150 billion ($1.55bn) for the year ending March, 2009 – down 59 percent on the previous year. The figure is also well below previous estimates of ¥240 billion ($2.47bn). Operating profits estimates now stand at ¥200 billion ($2.06bn), down from previous forecasts of ¥470 billion ($4.85bn). Revenues are expected to rise by only 1.5 percent, from last year’s figure of ¥9.0 trillion ($92.81bn). The company attributes the fall largely to the strong yen, which drastically reduces earnings from outside of Japan. Poor sales of televisions, compact cameras and camcorders were also responsible, along with the general global economic slowdown and increased price competition. Sales in the three months from July to September were particularly problematic, with net profits dropping by 72 percent to ¥21 billion ($217m) and operating profit down 90 percent to ¥11 billion ($112m). "The economic situation has rapidly deteriorated," quoted an AFP news report of Sony CEO Nobuyuki Oneda, who also described the downturn as "beyond our expectations". Oneda indicated that the company was looking for ways to continue to cut costs and did not rule out further job losses.