Sony '06/07 profit down 68 pct, sharp upturn ahead

Tokyo, May 16: Sony Corp. reported a 68 percent fall in annual profit on Wednesday due to hefty losses in its game business and costs to recall PC batteries, but it forecast steep growth this year that beats market expectations.

Operating profit at Sony, the world's largest liquid crystal display (LCD) TV maker, came to 71.75 billion yen (6.8 million) in the year ended March 31, down from 226.42 billion yen a year earlier.

The Japanese electronics and entertainment conglomerate was hit hard last year by massive costs to launch the PlayStation 3 (PS3) game console and recall 9.6 million units of its laptop PC batteries, which in rare cases could catch fire from overheating.

Sony, however, is taking steps to cut production costs for the PS3 and is starting up an advanced LCD panel plant with Samsung Electronics Co. Ltd. this year, shoring up its profitability.

For the year to March 2008, the Tokyo-based company forecast an operating profit of 440 billion yen, exceeding a consensus of 377.8 billion yen in a poll of 20 analysts by Reuters Estimates.

Shares in Sony rose 10 percent during the previous business year, outpacing the Tokyo stock market's electrical machinery index IELEC, which was up 0.5 percent.

Reuters>