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UPDATE 2-Sony warns may fall short of LCD TV sales target

* Will likely fall short of 2010/11 25 mln LCD TV target-exec

* Holiday season sales strong in developing economies -exec

* Hard to pull TV unit into black for year to March

* Talks continue on hiking stake in Sharp 6753.T LCD plant (Adds comment, details)

By Reiji Murai

TOKYO, Dec 20 (Reuters) - Sony Corp 6758.T will likely fall slightly short of its target to boost LCD TV unit sales by 60 percent this financial year, an executive said on Monday, helping push the electronics maker's shares down 1 percent.

Sony Executive Deputy President Hiroshi Yoshioka told a group of reporters that Sony would struggle to make the TV division profitable this year and that he was not expecting substantial profits from the operations in the next financial year.

After losing money on televisions for the past 6 years, Sony has been hoping that the introduction of 3D and Internet-capable models would help it lift sales of LCD TVs to 25 million in the year to March 2011, and make the business profitable.

Last week the largest U.S. electronics retailer, Best Buy Co Inc BBY.N, surprised investors by reporting a drop in quarterly sales at existing stores. It said that sales of 3D TVs had fallen behind industry expectations. [ID:nN13207737]

“There are some who are worried about how much content has been prepared and others who mistakenly assume that 3D TVs can only show images in 3D,” Yoshioka said.

Shares of Sony were down 1 percent at 2,934 yen in afternoon trade in Tokyo. The Nikkei average .N225 fell 0.8 percent.

“The news about not meeting the sales target is having an impact on the share price, along with a slightly stronger yen to the dollar,” said Tomomi Yamashita, fund manager at Shinkin Asset Management.

Yoshioka, who is in charge of Sony’s TV, digital camera and electronic device operations, said that holiday sales were in line with overall expectations, with growth strong in emerging markets and demand in developed economies flat year-on-year.

Yoshioka said Sony was still in talks with Sharp Corp 6753.T on whether it would raise its stake in a state-of-the art TV panel plant in Sakai, western Japan.

Media reports have said that Sony is set to drop a plan to raise its investment in the joint venture to 34 percent as it seeks lower-cost panel suppliers in other parts of Asia [ID:nTOE6AQ00E]. (Additional reporting by Isabel Reynolds; Writing by James Topham; Editing by Nathan Layne)

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