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Sony quarterly loss on weak sales Strong yen hurts Japanese firms
(about 1 hour later)
Sony, set to make its first annual loss in 14 years, has reported a quarterly loss as weak sales of goods and a stronger yen have taken their toll.Sony, set to make its first annual loss in 14 years, has reported a quarterly loss as weak sales of goods and a stronger yen have taken their toll.
The firm reported an operating loss of 18bn yen ($200m; £141m) for the October to December third quarter, down from 236.22bn yen profit a year before.The firm reported an operating loss of 18bn yen ($200m; £141m) for the October to December third quarter, down from 236.22bn yen profit a year before.
The broader global recession has hit consumer demand for its products. It comes as Toshiba expects to make an annual loss as demand wanes for flat screen televisions and semiconductors.
Nintendo is set to give its quarterly results too, giving a further indicator of the state of Japan's economy. Meanwhile Nintendo's profits are up but it has cut its yearly profit forecast.
Unconventional games
The video games maker reported a 27% increase in April to December operating profit, to 501bn yen, thanks to strong demand for its Wii games console and DS handheld.
The two devices have no real rivals and, as unconventional games billed as improving fitness or mental, agility have had wide appeal.
However, like Sony, it said the stronger yen was taking its toll, and lowered its annual operating profit forecast to 530 billion yen from 630bn yen.
A stronger yen makes Japanese products less competitive and cuts into the value of overseas earnings.
Job cutsJob cuts
Japanese firms have dominated the electronics business for decades, but are now suffering. Japanese firms have dominated the electronics business for decades, but are now suffering, as the broader global recession has hit consumer demand for its export products.
Exporters are struggling from falling worldwide demand for their products.
They have also been hit by a strong yen which currently makes it harder to compete against rivals from countries such as South Korea.They have also been hit by a strong yen which currently makes it harder to compete against rivals from countries such as South Korea.
Last week Sony has said it was going make its first annual loss in 14 years as the global economic slowdown hits demand for its products.Last week Sony has said it was going make its first annual loss in 14 years as the global economic slowdown hits demand for its products.
On Thursday it reiterated its latest forecast of a record 260bn yen operating loss for the year to 31 March.On Thursday it reiterated its latest forecast of a record 260bn yen operating loss for the year to 31 March.
Sony is taking restructuring steps including cutting 16,000 jobs and closing five or six plants.Sony is taking restructuring steps including cutting 16,000 jobs and closing five or six plants.
'Price erosion''Price erosion'
Toshiba has now also said it expects to make a loss for the year to March as demand wanes for semiconductors and flat-screen televisions. Also on Thursday, Toshiba has now also said it expects to make a loss for the year to March as demand wanes for semiconductors and flat-screen televisions.
The electronics and engineering giant expects a net loss of 280bn for the 12 months, against 127.4bn yen net profit the previous year.The electronics and engineering giant expects a net loss of 280bn for the 12 months, against 127.4bn yen net profit the previous year.
In a statement, Toshiba said the worldwide economic slowdown "caused rapid price erosion and demand declines in semiconductors and liquid-crystal display" televisions.In a statement, Toshiba said the worldwide economic slowdown "caused rapid price erosion and demand declines in semiconductors and liquid-crystal display" televisions.
One bright spot for the electronics industry has been Nintendo. Overall Japanese exports were down 35% in December, compared to a year earlier, with factories cutting production and laying off workers.
Its Wii Console and DS handheld device have no real rivals and unconventional games billed as improving fitness or mental agility have wide appeal. 'Totally insufficient'
But overall Japanese exports were down 35% in December, compared to a year earlier, with factories cutting production and laying off workers.
Japan's Prime Minister Taro Aso has told parliament he will take bold steps to make his the first country to emerge from the global crisis.Japan's Prime Minister Taro Aso has told parliament he will take bold steps to make his the first country to emerge from the global crisis.
Mr Aso is struggling against poor approval ratings - regularly hitting new lows in the popularity stakes - ahead of a general election due later this year.Mr Aso is struggling against poor approval ratings - regularly hitting new lows in the popularity stakes - ahead of a general election due later this year.
Some market figures have called for more aggressive Japanese government action to halt the yen's rise.
"We're currently in a deep recession, yet the Japanese government's policies are totally insufficient," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.