Sony slashes profit outlook, Sharp cuts jobs first time in 60 years

Thu Aug 2, 2012 6:38am EDT
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By Tim Kelly

TOKYO (Reuters) - Sony Corp (6758.T: Quote) slashed its forecast for 2012/13 operating profit and lowered its sales expectations for key products including its handheld PSP and PS Vita devices as new boss Kazuo Hirai battles to revive the fortunes of the electronics giant.

Sony said April-June operating profit fell a much steeper-than-expected 77 percent to 6.28 billion yen ($80 million) compared with a year earlier, blaming a strong yen and weak economies. Analysts had penciled in a 36 percent fall.

Rival Sharp Corp (6753.T: Quote) announced a 94 billion yen operating loss ($1.2 billion) for the June quarter and plans its first job cuts in more than 60 years as Japan's electronics industry scrambles to keep up with foreign competitors.

Sony shares hit a 32-year low in July on waning investor confidence it will be able to close the gap with the likes of Apple Inc (AAPL.O: Quote), Samsung Electronics Co Ltd (005930.KS: Quote) and Microsoft Corp (MSFT.O: Quote).

"I think they're in a pretty difficult position," said Yuuki Sakurai, CEO of Fukoku Capital Management, the asset management unit of Japan's Fukoku Mutual Life Insurance.

"If they don't clearly show what is going to change under the new management I think the market will crush the stock again."

In the latest sign of that struggle, Sony cut some projections for product sales for the year to March 2013.

The firm said it expected to shift 15.5 million TVs, down from a May projection of 17.5 million. It projected PSP and PS Vita handheld device sales of 12 million, down from 16 million, but maintained a forecast of 16 million sales for the PlayStation games console.   Continued...

A logo of Sony Corp is pictured at an electronic store in Tokyo June 27, 2012. REUTERS/Yuriko Nakao