Sony hit by global economic downturn

As a result of the economic downturn, electronics giant Sony has issued a profits warning and has cut its earnings forecasts by 57%.

The Japanese company said operating profits are now expected to be 200 billion yen (£1.25 billion) for the 12 months to March 2009, revised from an earlier forecast of 470 billion yen.

Meanwhile, the company expects annual net profits to be 150 billion yen, down from a previous forecast of 240 billion yen.

The group blamed its revised forecasts on the strength of the yen against the euro and the dollar. It has also been hit by price competition in the LCD, digital camera and camcorder market.

Japan’s other major exporters including Canon, Panasonic and Toshiba have also been hit by the strength of the yen.

However, on a positive note, Sony’s PlayStation Portable has been outselling its rival Nintendo DS by five to one, since it was launched earlier this month in America, Japan and Europe.

Sony shares fell 6% following the news.

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