Sony posts surprise Q4 loss, forecasts growth

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Sony Corp posted a surprise quarterly loss as the weak stock market ate into the value of securities held by its financial arm, but it forecast a bigger-than-expected profit this year as it boosts sales of digital cameras and flat TVs.

Sony, locked in a three-way battle with Microsoft Corp and Nintendo Co Ltd in the game industry, was able to narrow down losses in its videogame operations by cutting manufacturing costs of the PlayStation 3 game console.

The Japanese electronics and entertainment conglomerate also enjoyed robust sales of Cyber-shot digital cameras, but its flat TV operations struggled due to fierce price competition.

Sony said it expected its operating profit to grow 20 percent to 450 billion yen ($4.34 billion) in the year to March 2009, beating a consensus of 428.5 billion yen in a poll of 17 analysts by Reuters Estimates.

"The forecast for 450 billion yen in operating profit this financial year looks solid, given that there's been speculation the yen's rise and slower U.S. growth could have a negative impact," said Mizuho Securities analyst Koichi Hariya.

"The results could lead to bullish sentiment on Sony shares."

Japanese exporters including Sony are facing tough business conditions this year due to a firmer yen, rising raw materials prices, and signs of a slowdown in the global economy.

It posted an operating loss of 4.7 billion yen in January-March, an improvement from the 113.37 billion yen loss it posted a year earlier when it was hit hard by hefty startup costs for the PS3.

But the result still fell short of an average estimate of a 27.3 billion yen profit from five analysts surveyed by Reuters.

Sony aims to sell 17 million liquid crystal display TVs in the year to next March, up from 10.6 million in the year just ended. That compares with Sharp Corp's target to sell 10 million LCD TVs and Matsushita's plans to sell 11 million flat TVs.

Unlike Sony and Sharp, Panasonic maker Matsushita Electric Industrial Co Ltd sells both LCD and plasma models.

"The business environment is not so good but we will generate sales growth from LCD TVs," Sony Chief Financial Officer Nobuyuki Oneda told a news conference.

In a bid to secure enough display panels for its Bravia LCD TVs, Sony plans to take a one-third stake in Sharp's 380 billion yen LCD panel plant set for completion by March 2010.