Japanese technology giant Sony slashed its profit forecasts because of costs from a massive global recall of laptop batteries and price cuts in Japan for the next-generation PlayStation 3 video game console, an Associated press report said.
The report said Sony now expected a group net profit of 80 billion yen ($673 million) for the fiscal year through March 2007, down 38% from the 130 billion yen ($1.1 billion) it had projected in July.
The revision revealed the deep troubles at the Japanese manufacturer as it tackled a turnaround under its first foreign chief executive, Welsh-born American Howard Stringer, the repot said.
Sony might need to further lower its projections as losses related to the battery recall might grow, said Tatsuya Mizuno, analyst at Fitch Ratings in Tokyo. Toshiba had said it might demand damage compensation from Sony, and others might follow suit, the report added.
Sony left unchanged its fiscal year sales outlook at 8.23 trillion yen ($69 billion), but lowered its operating profit 62% to 50 billion yen ($420 million) from the earlier forecast of 130 billion yen ($1.1 billion), the report further said.