Sony earnings slide 90 percent

By staff and wire reports

TOKYO, Japan -- Sony Corp. on Thursday reported a shock 90 percent slide in earnings for the June quarter.

Japan's tech bellwether and consumer-electronics top dog fell victim to the slowing global economy.

Group operating profit tumbled to $24.3 million for the quarter. That's far below analyst expectations of $211 million to $300 million.

It's also a drastic change from the same period last year, when it made $248.3 million.

On a net basis, the electronics giant saw a loss of $244 million, compared to a loss of $749.6 million in the same quarter a year ago.

But Sony's sales were up, rising 4.4 percent year-on-year to $13.3 billion.

Slashed forecasts

While the weak yen will offer some relief for the exporter, Sony's bottom line was hit by its costly handset recalls.

The recent slump in Japan's PC market also hurt. And Japan said Thursday retail sales dropped for the third month, down 2.7 percent in June.

In response, Sony sharply cut its earnings forecast for this fiscal year, through March 2002.

The company now expects group net profit to be $728.9 million, compared with its April forecast of $1.2 billion.

Group operating profit is expected to come in at $2 billion, compared with Sony's April forecast of $2.4 billion.

Analysts say the company is also likely to be affected by sluggish PlayStation 2 game console sales, especially when competition heats up in the Northern autumn with the appearance of rival consoles from Nintendo and Microsoft.

Sony shares ended Thursday down 0.7 percent at 7,070 yen ahead of its earnings. But Sony's results came after the bell in Tokyo.

Its stock was slumping 5 percent in after-hours trade.

Reuters contributed to this report.