UPDATE 1-Sony, Sharp shares plunge on massive loss estimates
TOKYO, April 11 (Reuters) - Shares of Sony Corp and Sharp Corp plunged on Wednesday after the TV makers flagged a combined 900 billion yen ($11 billion) in full-year net losses, highlighting the crumbling of earnings in Japan's once-mighty electronics industry.
Japanese firms such as Sony that once dominated the consumer electronics landscape have been increasingly outgunned by more innovative rivals such as Apple Inc and Samsung Electronics, with a strong yen and tumbling TV prices only adding to the pain.
Their current predicament could ironically draw some parallels to their 1980s heyday, when previously dominant U.S. consumer electronics makers such as Zenith struggled to make money amid low TV prices and were overtaken by a more cost-efficient Japan Inc. Now, it is South Korean firms Samsung and LG Electronics that have taken the baton.
The focus now shifts to what steps they can take to turn the tide, with Sony's new CEO Kazuo Hirai set to lay out his revival strategy in more detail at a briefing on Thursday. Media reports this week said Sony planned to cut 10,000 jobs as part of its turnaround bid.
"We like the way it has taken steps to eliminate issues of concern as part of moves to deliver a reborn Sony," Nomura Securities said in a report. "We still regard downsizing and product strategies worthy of the Sony brand as indispensable preconditions of any share price upside."
Sony on Tuesday said it expected a record net loss of 520 billion yen for the fiscal year ended March 31, more than double its previous estimate and its fourth straight year in the red, as the company writes off deferred tax credits due to the company's consistent losses.
Aquos TV maker Sharp deepened its full-year net loss forecast to 380 billion yen from 290 billion yen.
Together with Panasonic Corp's forecast for a 780 billion yen net loss in the just-ended fiscal year, the three Japanese TV manufacturers expect to have lost 1.68 trillion yen ($20.76 billion) - roughly the size of Sony's entire market value, according to Thomson Reuters data.
Sony shares were down 6.1 percent at 1,490 yen after hitting a two-month low of 1,473 yen soon after the open. Sharp was 3.4 percent lower at 512 yen.