Sony slides to three-decade low on strategy doubts
By Dominic Lau
TOKYO (Reuters) - Shares in Sony Corp slumped more than 7 percent to near 32-year lows, as investors doubted the Japanese consumer electronics giant has a strategy to fix its loss-making TV business and compete in the smartphone market against Apple Inc and Samsung Electronics.
The last time Sony shares were this low, in the summer of 1980, its first Walkman portable cassette player had just gone on sale in the United States. So far this year, Sony has seen more than $3 billion wiped off its market value.
The maker of Bravia TVs, Vaio laptops and PlayStation games consoles on Thursday posted a record annual loss of $5.7 billion, but forecast a first profit in five years as it looks to halve losses at its ailing TV business. The net profit forecast was below analysts' expectations.
Japanese firms, which long dominated the global TV industry, have been overtaken by Samsung and LG Electronics, which are rolling out next-generation sets using organic light emitting display (OLED), in a reshaping of Asia's flat panel sector. A stronger yen, which erodes the value of exports, has also not helped.
"(In the past) if you wanted a top quality TV you had to buy a Sharp, Panasonic or Sony. Those days are gone," Steve Durose, Senior Director and Head of Asia-Pacific at Fitch Ratings, told Reuters last month.
"I didn't see anything positive in there (Sony's results)," said a trader at a U.S. bank. "There's really nothing in there that can justify buying the stock. You see the loss narrowing in the TV business. That's fine, but I don't see any future in the TV business, so it doesn't matter what they do."
Shares of Panasonic Corp, which makes Viera TVs, also fell, 1.6 percent, to their lowest close in more than three decades. After the market closed, Panasonic also posted a record annual loss, of $9.7 billion, and predicted a return to profit this year after a heavy bout of cost-cutting and restructuring.
Sharp Corp, Japan's other main TV manufacturer, fell 5.1 percent to its lowest close since November 1979. Continued...