Sony swings to Q1 profit, raises forecast

Tokyo, July 27: Sony Corp. swung to a better-than-expected quarterly operating profit on Thursday, propelled by robust sales of flat TVs and gains from mobile phone joint venture with Ericsson, and raised its annual forecast by 30 percent.

A weaker yen also helped the electronics and entertainment conglomerate overcome valuation losses at its life insurance unit and start-up costs for its PlayStation 3 game console.

Sony will launch PS3, the latest version of its blockbuster game machine, in November. It will compete for holiday buyers' attention with Nintendo Co. Ltd.'s upcoming Wii and Microsoft Corp.'s Xbox 360 in the nearly billion video game market.

Operating profit totalled 27.05 billion yen (2.5 million) in April-June versus a 6.58 billion yen loss a year earlier.

The result beat a consensus forecast of 18 billion yen in a poll of seven analysts by Reuters Estimates.

For the full year to next March, Sony revised up its operating profit forecast by 30 percent to 130 billion yen, still missing a consensus of 159.8 billion yen from 18 brokerages polled by Reuters Estimates. The new forecast compares with a 191.26 billion yen profit last business year.

Sony's announcement comes a day after rival Matsushita Electric Industrial Co. Ltd., a maker of Panasonic brand products, reported a 41.5 percent jump in quarterly profit on strong demand for its plasma TVs.

In the liquid crystal display (LCD) TV market, Sony had lagged far behind Sharp Corp.

But a multi-million dollar marketing campaign for its Bravia brand TVs and joint panel production with Samsung Electronics Co.

Ltd. turned the Tokyo-based company into a contender for the top spot in the fast-growing market last year.

Shares of Sony closed up 2.2 percent at 5,020 yen ahead of the result, outperforming the Tokyo stock market's electrical machinery index, which rose 1.8 percent.

Sony lost more than 7 percent in the financial first quarter, roughly in line with the Tokyo stock market's electrical machinery index.

Reuters