Sony Sinks to Third Straight Quarterly Loss

TOKYO -(Dow Jones)- Sony Corp. (6758.TO) said Friday it sank to its third straight quarter of losses in the July to September period, hamstrung by the strong yen and still-soft demand for its electronics products.

But as it soaks up hefty restructuring costs to cope with the lingering effects of the global economic downturn, Sony returned to operating profit in its core consumer products business, and the overall loss was much narrower than company watchers had feared. And with a brighter global economic outlook in place for the second half, Sony said it now expects to lose less in the 12 months through March than it had originally expected.

Sony, the creator of the Walkman music player and Playstation video game system, said it made a net loss of Y26.3 billion in its fiscal second quarter, compared with a net profit of Y20.8 billion in the same period a year earlier. That was considerably narrower than a Y40.4 billion estimate compiled by Thomson Reuters from 15 analysts' forecasts.

The company said it now expects a net loss of Y95 billion for the fiscal year through March 2010, compared with a net loss of Y98.9 billion in the previous year. It had previously forecast a loss of Y120 billion for the current year.

Like its Japanese technology peers, Sony has been buffeted by the strong yen and a consumer spending slowdown triggered by global economic weakness. Friday, Sony said revenue slipped 20% in its fiscal second quarter to Y1.66 trillion from Y2.07 trillion a year earlier.

As the company seeks to cut billions of dollars in costs, Sony Chief Executive Howard Stringer is pushing through a turnaround program involving the loss of some 16,000 jobs. In the second quarter, Sony booked restructuring costs of Y32.8 billion, compared with Y0.9 billion a year earlier.

For the 12 months through March 2010, it now expects restructuring charges of Y130 billion, up from the Y110 billion previously forecast.

Sony's earnings are based on U.S. accounting standards.

-By Kenneth Maxwell, Dow Jones Newswires; +813 6895 7564; kenneth.maxwell@dowjones.com

(END) Dow Jones Newswires

10-30-09 0258ET