Sales, currency cause Sony to reduce forecast
Profits are expected to be almost 60 percent less this year. One of the main culprits: the increasingly unfavorable yen-to-dollar conversion rate amid the global economic downturn.
Electronics and entertainment giant Sony warned investors on Wednesday that its yearly profits will be far below what the company anticipated.
The Japanese company said it expects to record $1.5 billion (150 billion yen) in profit for the current fiscal year, which is a 59 percent drop from the previous year.
In July, Sony said it expected to post profits of $2.4 billion, or 240 billion yen.
One of the main culprits has been the increasingly unfavorable yen-to-dollar conversion rate. The company's headquarters are in Tokyo, but the bulk of its business is in the United States and Europe, two areas where the current global economic downturn is being felt the strongest.
While its gaming and movies divisions' upcoming yearly results are in line with expectations, Sony said its consumer electronics business has been hurt by slowing sales of televisions and cameras, according to The Associated Press. The in the broader flat-panel TV industry are also to blame, Sony said.
The company is due to report its fourth-quarter and yearly earnings next Wednesday. For the quarter, Sony expects to record $215.2 million (21 billion yen) in profit, a 72 percent decrease from a year ago, and sales of $21.2 billion (2.07 trillion yen), a 1 percent decrease.