Sony shares take a tumble

Tokyo - Shares of Sony Corp plummeted 14% on Friday after the Japanese electronics giant slashed its annual profit and sales forecasts due to poor demand amid a global slowdown.

Sony said on Thursday afternoon its net profit for the fiscal year through March 2009 would likely drop 59% from the previous year to ¥150bn. It blamed deteriorating sales of flat-panel TVs and other gadgets for the dismal projection.

Previously, Sony had expected to post ¥240bn in profit for the fiscal year.

"It was yet another indicator that the global economy is really slowing. The revision had a very negative impact on other tech-related stocks," said Yutaka Miura, senior strategist at Shinko Securities.

Sony's stock tumbled 14.1% to close at ¥1 972. Tokyo's benchmark Nikkei index nose-dived 9.6% to finish at 7 649.08, the lowest in more than five years.

Apart from sluggish global demand amid the deepening financial crisis, Sony gave the unfavourable currency rate as another big reason for the faltering results.

Sony, which makes the Walkman portable music player and PlayStation 3 game console, had counted on the dollar trading at about ¥105, but changed that expectation to ¥100.

On Friday, the dollar fell as low as ¥94.75, a 13-year low.

Fears have been growing about the earnings of major Japanese companies scheduled to announce results in the next few weeks. Sony is scheduled to release earnings on Wednesday.

The financial credit crisis, which began in the US, is expected to weigh on exporters like Sony, which rakes in more than half its sales in North America and Europe.

Sony also lowered its sales forecast for the fiscal year to ¥9 trillion from the previous ¥9.2 trillion, although that marks a 1% improvement from the previous fiscal year.

- AP