Sony Lowers Forecasts
Sony has revised its financial forecasts the 2006 fiscal year, and
as one might expect given the headlines of late, the news isn't all
that good. While the company still expects revenues of 8.23 trillion
yen (about $69 billion), it has lowered its group operating profit
forecast by 62% to 50 billion yen ($424 million) and net profit
projection by 38% to 80 billion yen ($678 million).
The biggest single factor in the new estimates is the recent recall of
Sony brand lithium batteries. This worldwide operation contributed 51
billion yen ($432 million) to Sony's drop in operating profit
expecations.
The company's game division accounted for a 60 billion yen ($508
million) drop in the earnings estimates. The company cited two causes:
the changes to the specs and price of the PlayStation 3 and poor sales
of the PSP and PS2. The inclusion of HDMI ports in all 20 gigabyte PS3
models as well as other spec changes contributed 14 billion yen ($119
million) to the lowered forecasts. The lowered price of the Japanese
hardware contributed 16 billion yen ($136 million). Lower than expected
sales of the PSP coupled with overall drop in PS2 performance combined
for a 30 billion yen ($254 million) contribution.
Indirectly affected by the games division was Sony's electronics
division. Sony cited production changes for semiconductors and other
PS3-targeted devices as lowering overall productivity and causing a 33
billion yen ($280 million) drop in expected operating profit.
On the bright side of things, Sony expects a big turn around in profits for 2007.
Anoop Gantayat
October 19, 2006
Source:
IGN