Sony shares plunge 11% on slashed full-year outlook

TOKYO, Japan – Shares in Sony plunged more than 10% on Friday morning, November 1, after the Japanese electronics giant slashed its full-year profit outlook.

The shares were trading at 1,686 yen in Tokyo, a day after Sony cut its earnings forecast for 2013 to March by 40% due to tepid demand for its digital cameras, personal computers and televisions.

It also pointed to a weaker-than-expected performance in its film business due to box office flops such as “White House Down” and “After Earth.”

On Thursday, the maker of Bravia televisions and PlayStation games consoles said it lost 15.8 billion yen ($160 million) in the 6 months to September and cut its full-year profit outlook to 30 billion yen from 50 billion yen.

Before the tumble, Sony stock had nearly doubled since January as it rode a strong rally on the Tokyo stock market this year.

Japan’s electronics giants, including Sony rivals Panasonic and Sharp, have been undergoing painful restructuring to stem years of losses as they struggle to keep up in the low-margin television business, while rivals including Apple and South Korea’s Samsung surge ahead in the lucrative smartphone sector.

But Sony chief Kazuo Hirai has shrugged off pleas to abandon the television unit altogether, while the firm has also turned down a call by US hedge fund boss Daniel Loeb to spin off 20% of its entertainment arm, which includes the Hollywood film studio, to boost profits.

The company is banking on strong holiday sales of its PlayStation 4 games console as rivals Nintendo and Microsoft also jockey for control of the sector. – Rappler.com