Sony's quarterly loss widens

updated 7:58 a.m. ET May 16, 2007

TOKYO - Sony's loss in the January-March quarter widened from a year ago on massive costs for the new PlayStation 3 game machine, but the company forecast that profit for the current year would more than double to a record on strong sales of flat TVs and other electronics.

Sony Corp. racked up a 67.6 billion yen, or $563 million, loss for the fourth quarter of the fiscal year, it said Wednesday, worse than the 66.5 billion yen loss the Japanese electronics and entertainment company reported the same period a year earlier.

Quarterly sales rose nearly 13 percent to 2.01 trillion yen ($16.8 billion;) from the previous year, according to the company behind the Walkman portable music player and "Spider-Man" movies.

Solid demand for Bravia liquid crystal display TVs, Vaio personal computers and Handycam video cameras buoyed sales, lifting profit for the fiscal year through March 2 percent to 126.3 billion yen ($1.1 billion).

For the current fiscal year, Sony expects profit will more than double to a record 320 billion yen ($2.7 billion). That upbeat outlook appeared to reflect a much-promised revival at its electronics unit, which had been battered by competition from cheaper rivals, threatening one of Japan's most prized brands.

"The good news is that profitability is being maintained in the electronics unit as well as sales," said Mitsuhiro Osawa, electronics analyst at Mizuho Investors Securities Co. in Tokyo.

"The results came about because of wise steering on the part of management," Osawa added, referring to the drastic revival efforts spearheaded by Welsh-born American Howard Stringer, Sony's first foreign chief executive.

After taking helm in 2005, Stringer got Sony to drop unprofitable businesses, sell off assets, reduce jobs and shutter plants.

Sales for the just-ended fiscal year totaled a record 8.3 trillion yen ($69 billion), up 10 percent from the previous year.

For the year through March 2008, it projects sales will grow 6 percent to 8.78 trillion yen ($73.2 billion).

"Our results demonstrate a healthy recovery," said Corporate Executive Officer Nobuyuki Oneda, adding that the Bravia controls top world market share in the sector measured in sales.

The sale of its former headquarters in Tokyo will add 59 billion yen ($492 million) for the fiscal year through March 2008, Sony said.

The absence of expenses for a massive recall of battery packs for laptops, totaling about 51 billion yen ($425 million) in fiscal 2006 will add to its bottom line, it said.

Last year, Sony announced a massive global recall of about 10 million lithium-ion batteries used in not only its own laptops but also those from Apple Inc., Dell Inc., Lenovo Group Ltd. and others, which were suspected of being faulty and bursting into flames in some cases.

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