Friday January 23, 10:09 AM
Sony shares plunge after record-loss forecast
TOKYO (AFP) - Shares in Sony Corp (Munich: 853687 - news) . tumbled more than seven percent on Friday after the iconic Japanese company forecast its biggest-ever operating loss amid the global economic crisis.
Investors questioned whether chief executive Howard Stringer's plans to speed up restructuring, closing a television plant in Japan as part of efforts to save 250 billion yen a year, was enough to turn the company around.
Last month Sony said it would slash 16,000 jobs and axe plants, but it has yet to finalise the overhaul.
"We believe that the captain has finally convinced his crew that the Sony super tanker is in trouble," said Macquarie Securities analyst David Gibson.
The company now appears to have "woken up" and has a sense of urgency, he said, welcoming the group's focus on melding hardware and content.
"However, this is a message that we have heard before, and what we are looking for is execution, which so far we have found unimpressive," Gibson said.
After the closing bell on Thursday, Sony warned it expects its biggest-ever operating loss of 260 billion yen (2.9 billion dollars) as the global crisis saps demand for televisions, cameras and video game consoles.
The huge loss would be Sony's first in 14 years and a dramatic reversal from its earlier goal of a 200-billion-yen profit.
"It's already been a while since Sony lost its shining image," said Hideaki Higashi, strategist at SMBC Friend Securities.
He said it was "important to stop bleeding in an emergency."
But Sony, the inventor of the Walkman, needs to come up with another innovative product such as the mega-hit music player iPod, which turned around the fortunes of US computer giant Apple Inc (NASDAQ: AAPL - news) ., he said.
Sony shares dropped 7.01 percent to end at 1,802 yen.
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