Sony shares jump on outlook hike and Q1 profit

By Isabel Reynolds

TOKYO (Reuters) - Sony Corp shares jumped more than 3 percent and briefly hit their highest intraday level in nearly two months after the company lifted its annual outlook on booming demand for its Bravia flat TVs and PlayStation 3 game consoles.

Thanks to aggressive cost cuts and growing sales in developing markets, the electronics and entertainment giant also returned to profit in the first quarter, surprising investors who had expected a quarterly loss.

"They raised their profit outlook despite the stronger yen, so of course this exceeded our expectations," said Takao Hattori, a senior analyst at T.I.W. in Tokyo.

"But the real battle comes in the third quarter, so we can't really pass judgment until we see what happens then," he added, referring to the shopping season ahead of the year-end holidays. "There is certainly some concern as to whether this trend can continue."

Sony, the world's second-largest camera maker after Canon Inc and the No. 3 maker of flatscreen TVs after Samsung Electronics and LG Electronics, has suffered a dearth of groundbreaking products in recent years.

But the company singled out its minimalist "Monolithic design" televisions and lightweight NEX cameras as hit products that it hopes can spark electronics-led growth.

For the year to March 2011, Sony lifted its operating profit outlook by 12.5 percent to 180 billion yen ($2.1 billion), compared with a consensus estimate of 152.6 billion in a poll of 22 analysts by Thomson Reuters I/B/E/S.

On the downside, Sony must battle persistent strength and tough competition with South Korean rivals such as Samsung, which posted record quarterly profits on Friday, but warned that the outlook was less rosy, with demand for handsets and TVs uncertain.