TOKYO (Reuters) - Sony Corp (6758.T) slashed its annual operating profit forecast by 57 percent to far below market expectations, citing a firmer yen and fierce price competition in the flat TV and digital camera markets.
The electronics and entertainment conglomerate earns more than three-quarters of its revenue overseas, making its earnings susceptible to any substantial foreign exchange moves.
Sony now expects operating profit to come in at 200 billion yen ($2 billion) in the year ending March, down from its previous estimate of 470 billion yen and compared with a consensus of 381.8 billion yen in a poll of 20 analysts by Reuters Estimates.
Yoku Ihara, manager at investment information department at Retela Crea Securities, said the revision was not a surprise.
“In addition to the negative forex impact, Sony’s electronics business has been lacklustre. Sony does not have a particularly strong product.”
Sony lowered its full-year net profit forecast by 38 percent to 150 billion yen.
Besides the yen’s appreciation, a global economic slowdown is expected to hurt the profitability of its LCD TV, compact digital camera and camcorder operations, Sony said.
Prior to the announcement, shares in Sony, which competes with Samsung Electronics Co Ltd (005930.KS) and Panasonic Corp (6752.T) in flat TVs, closed down 6.3 percent at 2,295 yen, underperforming the Tokyo stock market’s electrical machinery index .IELEC.T, fell 4.1 percent.
Sony’s chief financial officer Nobuyuki Oneda is set to speak to a news conference on the earnings revision at 5:30 p.m. (0830GMT).
Reporting by Kiyoshi Takenaka; Editing by Hugh Lawson