TOKYO - Shares of Sony Corp. plummeted 12 per cent Friday morning after the Japanese electronics giant slashed its annual profit and sales forecasts due to poor demand amid a global slowdown.
Sony said Thursday afternoon its net profit for the fiscal year through March 2009 would likely drop 59 per cent from the previous year to 150 billion yen (US$1.5 billion). It blamed deteriorating sales of flat-panel TVs and other gadgets for the dismal projection.
Previously, Sony had expected to post 240 billion yen (US$2.4 billion) in profit for the fiscal year.
"It was yet another indicator that the global economy is really slowing. The revision had a very negative impact on other tech-related stocks," said Yutaka Miura, senior strategist at Shinko Securities.
Sony's stock tumbled 12.2 per cent to close at 2,015 yen in the morning session. Tokyo's benchmark Nikkei index lost nearly 5 per cent to end morning trading at 8,046.99.
Apart from sluggish global demand amid the deepening financial crisis, Sony gave the unfavorable currency rate as another big reason for the faltering results.
Sony, which makes the Walkman portable music player and PlayStation 3 game console, had counted on the dollar trading at about 105 yen, but changed that expectation to 100 yen.
On Friday, the dollar was changing hands at 95.56 yen, down from 97.62 yen.
Fears have been growing about the earnings of major Japanese companies scheduled to announce results in the next few weeks. Sony is scheduled to release earnings on Wednesday.
The financial credit crisis, which began in the U.S., is expected to weigh on exporters like Sony, which rakes in more than half its sales in North America and Europe.
Sony also lowered its sales forecast for the fiscal year to 9 trillion yen (US$92 billion) from the previous 9.2 trillion yen (US$94.3 billion), although that marks a 1 per cent improvement from the previous fiscal year.
