May 2, 2008 / 3:57 AM / 11 years ago

Sony 07/08 profit to quintuple but miss target: report

TOKYO (Reuters) - Sony Corp’s (6758.T) operating profit likely jumped more than fivefold to 380 billion yen ($3.6 billion) on strong sales of digital cameras in the year just ended, but it missed the company’s forecast by 30 billion yen, the Nikkei business daily reported.

That would also be below a consensus estimate of 393.6 billion yen in a poll of 17 analysts by Reuters Estimates.

Still, shares in Sony were up 3.1 percent at 4,930 yen as of midday, outperforming the Nikkei stock average's .N225 1.8 percent gain.

“Market players everywhere became so nervous in recent months and expected a deterioration in corporate earnings. Apparently, they had been expecting something worse than analysts’ estimates,” Ichiyoshi Investment Management chief fund manager Mitsushige Akino said.

The yen firmed sharply against the dollar in the previous quarter, hurting the profitability of electronics makers, which had already been hit by rising raw materials prices and an economic slowdown in the key U.S. market.

Sony spokeswoman Mami Imada said on Friday that the Nikkei report was based on the newspaper’s own speculation and declined to comment further.

Sony, which competes with Samsung Electronics Co Ltd (005930.KS) in flat TVs and Canon Inc (7751.T) in digital cameras, will report its full-year earnings on May 14.

Sony’s videogame division saw its operating loss shrink by about 100 billion yen in the year ended March 2008, helping boost overall profitability, the Nikkei said.

The game unit posted an operating loss of 232 billion yen in the year ended March 2007 due to hefty start-up costs for its PlayStation 3 game console.

But a sluggish stock market performance is expected to force Sony’ financial unit to post appraisal losses on its securities holdings, leading to a lower group operating profit than its January forecast of 410 billion yen, the Nikkei said.

Reporting by Sachi Izumi, Kiyoshi Takenaka; Editing by Chris Gallagher

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