Friday October 30, 11:01 AM
Japan's Sony still stuck in the red
By Kimiko de Freytas-Tamura
TOKYO (AFP) - Sony Corp. said on Friday it was still losing money, hit by weak demand for televisions, cameras, and other gadgets, but it upgraded its outlook for the rest of the year.
The Japanese electronics giant posted a net loss of 26.3 billion yen (290 million dollars) for the fiscal second quarter through September, swinging into the red after a 20.8-billion-yen profit a year earlier.
It logged an operating loss of 32.6 billion yen, compared with a profit of 11.0 billion in the same period of 2008. Revenue declined 19.8 percent year-on-year to 1.66 trillion yen.
Amid fierce price competition, the company is banking on its revamped PlayStation 3 game console and a new television line-up to drive a turnaround.
"We are making efforts to return our game and television businesses to the black in the next fiscal year," said chief financial officer Nobuyuki Oneda.
The maker of Bravia flat-panel display televisions faced tough competition from South Korean rival Samsung, which on Friday posted a record profit.
"Basically we lost to Samsung in terms of the attractiveness of products. We need to admit it," Oneda told reporters.
Falling prices mean Sony (Munich: 853687 - news) is still losing money on its televisions, cameras and PlayStation consoles, he said.
The company is pinning hopes on its new, slimmed down version of the PlayStation 3 console, which has recently outsold rival Nintendo's Wii in the United States and Japan.
"The PS3's momentum is continuing and its market penetration is accelerating," said Oneda.
Sony has announced new software and network services, including widely anticipated titles such as Final Fantasy 13, Gran Turismo 5, God of War 2 and Uncharted.
It also recently slashed the price of its portable PSP 3000 and released another handheld version, the PSP Go earlier this month in the US and Europe, to be followed in Japan on Sunday.
"We see potential for a renewed focus on the game business," Citigroup (NYSE: C - news) analysts wrote in a research note.
"The PS3 will start contributing to profits soon on strong sales of the new Slim console and high-margin proprietary game titles," they added.
The maker of Bravia televisions, PlayStation game consoles and Cyber-shot cameras maintained its forecast for its first back-to-back annual losses since it was listed on the stock market in 1958.
But it narrowed its loss forecast for the year to 95 billion yen from a previous projection of 120 billion.
Sony chief executive Howard Stringer is slashing 16,000 jobs and axing about 10 percent of the group's manufacturing plants in a bid to return to profit.
The company has had a difficult few years in the face of tough competition from rival products such as Apple (NASDAQ: AAPL - news) 's iPod and Nintendo's Wii. In May Sony announced its first annual loss in 14 years.
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