REG-Sony Corporation Sony Announces Revision of Consolidated Forecast & Outlines New Initiatives

TOKYO--(Business Wire)--

1-7-1 Konan, Minato-ku
Tokyo 108-0075 Japan

No: 09-012E
Date: January 22, 2009

SONY ANNOUNCES REVISION OF CONSOLIDATED FORECAST FOR THE FISCAL YEAR ENDING
MARCH 31, 2009

Tokyo, January 22, 2009 -- Sony Corporation has revised its consolidated results
forecast for the fiscal year ending March 31, 2009 from that announced on
October 23, 2008.

Consolidated Results Forecast

(Billions of yen)
Revised Forecast Change from October Change from March 31, 2008
October Forecast March 31, 2008 Actual Results
Forecast Actual Results
Sales and operating revenue ¥7,700 -14 % ¥9,000 -13 % ¥8,871.4
Operating income (loss) (260 ) - 200 - 475.3
(Equity in net income (loss) of (20 ) - 0 - 100.8
affiliated companies recorded within
operating income (loss))
(Restructuring charges recorded as 60 +200 20 +27 47.3
operating expenses)
Income (Loss) before income taxes (200 ) - 210 - 567.1
Net income (loss) (150 ) - 150 - 369.4

Assumed foreign currency exchange rates for the fourth quarter of the fiscal
year: approximately ¥90 to the U.S. dollar and approximately ¥120 to the euro.
(Assumed foreign currency exchange rates in the October forecast were
approximately ¥100 to the U.S. dollar and approximately ¥140 to the euro.)

This forecast is based on management`s current expectations and is subject to
uncertainty and changes in circumstances. Actual results may differ materially
from those included in this forecast due to a variety of factors. See
"Cautionary Statement".

The revised forecast is primarily due to the following factors:

1. Consolidated sales and operating income for the second half of the fiscal
year ending March 31, 2009 are expected to be significantly lower than the
October forecast, primarily due to a deterioration in the business environment
as a result of the global economic slowdown, the continued appreciation of the
yen, the impact from the decline in the Japanese stock market and an increase in
expected restructuring charges.

2. The following are factors that contributed to changes in operating income
(loss) forecast for each business segment for the second half of the fiscal
year, compared to the October forecast.

(1) In the Electronics segment, operating income (loss) is expected to be
approximately ¥340 billion lower than our earlier forecast. Of this,
approximately ¥250 billion is due to a deterioration in the business environment
brought on by the slowing global economy and an intensification of price
competition, approximately ¥40 billion is due to the impact of the appreciation
of the yen, approximately ¥30 billion is due to additional restructuring charges
and approximately ¥20 billion is due to a deterioration in equity in net income
(loss) of affiliated companies.

(2) In the Game segment, operating income (loss) is expected to be lower by
approximately ¥30 billion. Of this, approximately ¥15 billion is due to the
impact of the appreciation of the yen and approximately ¥15 billion is due to
lower-than-expected sales.

(3) In the Pictures segment, operating income is expected to be lower by
approximately ¥13 billion due to restructuring charges, a decline in revenue as
a result of the economic slowdown and the impact of the appreciation of the yen.

(4) In the Financial Services segment, operating income (loss) is expected to be
lower by approximately ¥65 billion mainly due to a deterioration in earnings at
Sony Life Insurance Co., Ltd. resulting from a significant decline in the
Japanese stock market. This is based on the assumption that the equity markets
will remain at the December 31, 2008 level until March 31, 2009. As is our
policy, the effects of gains and losses on investments due to market
fluctuations since January 1, 2009 are not incorporated within our forecasts for
the fiscal year ending March 31, 2009. Accordingly, market fluctuations could
further impact the revised forecast.

(5) Operating income within All Other is expected to be lower by approximately
¥11 billion due to lower-than-expected sales and additional restructuring
charges in the music business which constitutes a majority of the sales of All
Other.

3. The net effect of other income and expenses is expected to improve by
approximately ¥50 billion compared to the October forecast mainly due to the
recording of a net foreign exchange gain through our hedging activities.

In response to the rapid changes in the business environment, our forecast for
capital expenditures, depreciation and amortization, and research and
development expenses have been revised down from the forecast as of October 29,
2008 as per the table below.

(Billions of yen)
Revised Change October Change from March 31, 2008
Forecast from Forecast March 31, 2008 Actual Results
October Actual Results
Forecast
Capital expenditures ¥380 -12 % ¥430 +13 % ¥335.7
(addition to fixed assets) *
for semiconductors (included above) 80 -27 110 -11 90
Depreciation and amortization ** 410 -2 420 -4 428.0
for tangible assets (included above) 310 -6 330 -6 328.9
Research and development expenses 530 -2 540 +2 520.6

*Investments in equity affiliates are not included within the forecast for
capital expenditures.

**The forecast for depreciation and amortization includes amortization of
intangible assets and amortization of deferred insurance acquisition costs.

Preliminary Consolidated Results for the Quarter ended December 31, 2008

Preliminary consolidated results for the quarter ended December 31, 2008 are
included in the following table. The preliminary figures are based on the
information available at the time of issuance of this release. Actual results
may differ due to a variety of factors. Sony will announce its consolidated
operating results for the third quarter on January 29, 2009.

(Billions of yen)
Third quarter ended December 31
2007 2008 Change in yen
Sales and operating revenue ¥2,859.0 ¥2,150 -25%
Operating income (loss) 236.2 (18 ) -
(Equity in net income (loss) of 46.9 (11 ) -
affiliated companies recorded
within operating income (loss))
(Restructuring charges 11.2 12 +7
recorded as operating expenses)
Income before income taxes 335.3 66 -80
Net income 200.2 10 -95

Income before income taxes for the quarter ended December 31, 2007 includes a
gain of ¥81.0 billion for change in ownership interest in subsidiaries and
investees as a result of the global initial public offering of shares of Sony
Financial Holdings Inc. in connection with the listing of shares on the First
Section of the Tokyo Stock Exchange.

Cautionary Statement

Statements made in this release with respect to Sony`s current plans, estimates,
strategies and beliefs and other statements that are not historical facts are
forward-looking statements about the future performance of Sony. Forward-looking
statements include, but are not limited to, those statements using words such as
"believe," "expect," "plans," "strategy," "prospects," "forecast," "estimate,"
"project," "anticipate," "aim," "may" or "might" and words of similar meaning in
connection with a discussion of future operations, financial performance, events
or conditions. From time to time, oral or written forward-looking statements may
also be included in other materials released to the public. These statements are
based on management`s assumptions and beliefs in light of the information
currently available to it. Sony cautions you that a number of important risks
and uncertainties could cause actual results to differ materially from those
discussed in the forward-looking statements, and therefore you should not place
undue reliance on them. You also should not rely on any obligation of Sony to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Sony disclaims any such obligation.
Risks and uncertainties that might affect Sony include, but are not limited to
(i) the global economic environment in which Sony operates, as well as the
economic conditions in Sony`s markets, particularly levels of consumer spending
as well as the recent worldwide crisis in the financial markets and housing
sectors; (ii) exchange rates, particularly between the yen and the U.S. dollar,
the euro and other currencies in which Sony makes significant sales or in which
Sony's assets and liabilities are denominated; (iii) Sony`s ability to continue
to design and develop and win acceptance of, as well as achieve sufficient cost
reductions for, its products and services, including newly introduced platforms
within the Game segment, which are offered in highly competitive markets
characterized by continual new product introductions, rapid development in
technology and subjective and changing consumer preferences (particularly in the
Electronics, Game and Pictures segments, and the music business); (iv) Sony`s
ability and timing to recoup large-scale investments required for technology
development and increasing production capacity; (v) Sony`s ability to implement
successfully business reorganization activities in its Electronics segment; (vi)
Sony`s ability to implement successfully its network strategy for its
Electronics, Game and Pictures segments, and All Other, including the music
business, and to develop and implement successful sales and distribution
strategies in its Pictures segment and the music business in light of the
Internet and other technological developments; (vii) Sony`s continued ability to
devote sufficient resources to research and development and, with respect to
capital expenditures, to correctly prioritize investments (particularly in the
Electronics segment); (viii) Sony`s ability to maintain product quality
(particularly in the Electronics and Game segments); (ix) the success of Sony`s
joint ventures and alliances; (x) the outcome of pending legal and/or regulatory
proceedings; (xi) shifts in customer demand for financial services such as life
insurance and Sony`s ability to conduct successful asset liability management in
the Financial Services segment; and (xii) the impact of unfavorable conditions
or developments (including market fluctuations or volatility) in the Japanese
equity markets on the revenue and operating income of the Financial Services
segment. Risks and uncertainties also include the impact of any future events
with material adverse impacts.

Sony Outlines Initiatives to Enhance Profitability and Competitiveness

Sony Corporation ("Sony") today announced a series of measures designed to
improve its profitability and drive future growth in response to the
deterioration of the global economy. These initiatives focus on three areas:

* Structurally reform Sony`s core electronics operations to better compete with
its best in class peers in terms of speed to market and profitability.
* Continue margin improvement activities to lessen the impact of the weak
economic profile of key markets.
* Accelerate the integration between products and network services by leveraging
the combined strengths of Sony`s electronics and computer entertainment
operations.

Group-wide cost reduction of 250 billion yen in the next fiscal year

On December 9, 2008, Sony announced a series of measures across its Electronics
segment --including a review of its investment plans, the consolidation of
manufacturing sites and workforce optimization-- designed to deliver an
estimated total annual cost savings of more than 100 billion yen by fiscal year
end March 31, 2010. Sony intends to accelerate these actions, and in addition,
implement further initiatives which are being announced today. Through these
measures, together with anticipated restructuring to be achieved within the
game, music and pictures businesses, and significant cost reductions in
advertising expenditures, general expenses, logistics and other expenses, Sony
now anticipates that it will achieve group-wide cost reductions of 250 billion
yen (compared to the current fiscal year ending March 31, 2009) in the fiscal
year ending March 31, 2010.

Sony estimates the charges for these structural reforms to be 170 billion yen
through March 31, 2010 (60 billion yen in the current fiscal year and 110
billion yen in the fiscal year ending March 31, 2010).

Structural reform in Electronics businesses with priority on speed to market and
profitability

Sony is thoroughly reviewing all of its electronics categories to not only
enhance product strength, but also to reform as appropriate the fundamental
structure of its design, R&D, manufacturing, logistics, and sales processes, to
better compete with its best in class peers in terms of speed to market and
profitability. Already confirmed measures include:

(1) LCD TV Business

[Manufacturing Operations]

* Sony will close TV design and manufacturing operations at Sony EMCS
Corporation's Ichinomiya TEC by June 2009, with Japan operations to be
consolidated at Inazawa TEC.
* With the anticipated growth of emerging markets and the resulting demand for
more entry-level models, Sony will pursue further OEM/ODM deployment and a
far-reaching asset light strategy.

[Design Operations]

* Sony is standardizing global hardware and software design and integrating its
design and R&D resources around the world.
* Certain aspects of software development will be outsourced to off-shore
vendors, for example in India.
* The company is targeting a global headcount reduction of approximately 30%
across its TV design operations and related divisions by the end of the fiscal
year ending March 31, 2010.

(2) Semiconductor and Component Business

[Rationalization of R&D, Design and Manufacturing]

To strengthen its competitive position and ensure unified development, design
and manufacturing operations, Sony will move and consolidate its resources for
small and mid-size LCD panel operations to Sony Mobile Display Corp.
(headquartered in Aichi, Japan), and its battery operations to Sony Energy
Device Corp. (headquartered in Fukushima, Japan).

Employment-related Measures

The following measures will be carried out in Sony Corporation:

(1) Remuneration

* Corporate Executive Officer and Corporate Executive bonuses for the fiscal
year ending March 31, 2009 will be substantially reduced. In addition, plans are
in place to decrease fixed remuneration.
* In particular, the three Representative Corporate Executive Officers will
waive their entire bonus amount for the fiscal year ending March 31, 2009.
* With regard to management level employees, bonus and base salary are also to
be reduced.

(2) Early Retirement Program

* In order to optimize human resources, Sony will introduce an early retirement
program supporting employees to take up new opportunities beyond the Sony
group.

Cautionary Statement

Statements made in this release with respect to Sony`s current plans, estimates,
strategies and beliefs and other statements that are not historical facts are
forward-looking statements about the future performance of Sony. Forward-looking
statements include, but are not limited to, those statements using words such as
"believe," "expect," "plans," "strategy," "prospects," "forecast," "estimate,"
"project," "anticipate," "aim," "may" or "might" and words of similar meaning in
connection with a discussion of future operations, financial performance, events
or conditions. From time to time, oral or written forward-looking statements may
also be included in other materials released to the public. These statements are
based on management`s assumptions and beliefs in light of the information
currently available to it. Sony cautions you that a number of important risks
and uncertainties could cause actual results to differ materially from those
discussed in the forward-looking statements, and therefore you should not place
undue reliance on them. You also should not rely on any obligation of Sony to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Sony disclaims any such obligation.
Risks and uncertainties that might affect Sony include, but are not limited to
(i) the global economic environment in which Sony operates, as well as the
economic conditions in Sony`s markets, particularly levels of consumer spending
as well as the recent worldwide crisis in the financial markets and housing
sectors; (ii) exchange rates, particularly between the yen and the U.S. dollar,
the euro and other currencies in which Sony makes significant sales or in which
Sony's assets and liabilities are denominated; (iii) Sony`s ability to continue
to design and develop and win acceptance of, as well as achieve sufficient cost
reductions for, its products and services, including newly introduced platforms
within the Game segment, which are offered in highly competitive markets
characterized by continual new product introductions, rapid development in
technology and subjective and changing consumer preferences (particularly in the
Electronics, Game and Pictures segments, and the music business); (iv) Sony`s
ability and timing to recoup large-scale investments required for technology
development and increasing production capacity; (v) Sony`s ability to implement
successfully business reorganization activities in its Electronics segment; (vi)
Sony`s ability to implement successfully its network strategy for its
Electronics, Game and Pictures segments, and All Other, including the music
business, and to develop and implement successful sales and distribution
strategies in its Pictures segment and the music business in light of the
Internet and other technological developments; (vii) Sony`s continued ability to
devote sufficient resources to research and development and, with respect to
capital expenditures, to correctly prioritize investments (particularly in the
Electronics segment); (viii) Sony`s ability to maintain product quality
(particularly in the Electronics and Game segments); (ix) the success of Sony`s
joint ventures and alliances; (x) the outcome of pending legal and/or regulatory
proceedings; (xi) shifts in customer demand for financial services such as life
insurance and Sony`s ability to conduct successful asset liability management in
the Financial Services segment; and (xii) the impact of unfavorable conditions
or developments (including market fluctuations or volatility) in the Japanese
equity markets on the revenue and operating income of the Financial Services
segment. Risks and uncertainties also include the impact of any future events
with material adverse impacts.

Investor Relations Contacts:
Tokyo New York London
Gen Tsuchikawa Sam Levenson Shinji Tomita
+81-(0)3-6748-2180 +1-212-833-6722 +44-(0)20-7426-8696

Home Page: http://www.sony.net/IR/

Sony Corporation

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