Sony leads Japan's electronics makers back to black

TOKYO, July 29, 2010 (AFP) - Japanese electronics giant Sony on Thursday said it returned to the black in the fiscal first quarter thanks to strong sales in televisions, its PlayStation 3 console and computers.

The maker of Bravia televisions and Cyber-shot cameras reported a profit of 25.7 billion yen (293 million dollars) compared with a 37.1 billion yen loss a year ago.

Under chief executive and president Howard Stringer, the Japanese company has been streamlining operations and cutting costs to trim back the sprawling group, which was battered by the global downturn.

The electronics giant has been forced to undergo major restructuring -- slashing thousands of jobs, selling facilities and turning to suppliers for parts -- after seeing losses pile up as the financial crisis hit demand.

On Thursday Sony also upwardly revised its annual profit forecast by 20 percent to 60 billion yen in the year ending March 2011 despite worries over the yen's strength versus other major currencies, which could erode profits.

The company warned that "further appreciation of the yen against the euro is expected for the remainder of the year" and revised its exchange forecast to 110 yen versus the euro, compared with 125 forecast in May.

It maintained its previous forecast of 90 yen to the dollar.

Japanese exporters remain anxious about the recent strength of the safe-haven yen versus the euro and the dollar amid ongoing uncertainty over the eurozone economy and doubts over the durability of a US recovery.

If sustained, a stronger yen could erode repatriated overseas profits and make goods more expensive overseas.

In the quarter ended June, Sony posted an operating profit of 67 billion yen compared to a loss in the same period a year ago.

The company is also banking on the mounting popularity of products that enable three-dimensional viewing.

In April it released a software update enabling the PS3 to support 3D games. Televisions showing 3D images went on sale in Japan last month.

Shares in Sony closed 0.03 percent lower in Tokyo Thursday before the earnings announcement.

Separately Toshiba Corp. said Thursday that it barely returned to the black for the first quarter on strong demand for flash memory chips used in laptops, smartphones and other gadgets.

Toshiba reported a net profit of 466 million yen, reversing a net loss of 57.8 billion yen a year earlier. Its sales for the three months rose 9.7 percent to 1.47 trillion yen.

Toshiba, whose business spans across consumer electronics, industrial components and nuclear power plants, maintained its forecast for a net profit of 70 billion yen on sales of 7.0 trillion yen for the current financial year.

Rival Sharp Corp. also said it returned to the black in the first quarter to June with a net profit of 10.7 billion yen (123 million dollars) on strong sales of liquid crystal display screens and mobile phone handsets.

It had posted a net loss of 25.2 billion yen a year earlier.

Japan's top manufacturer of liquid crystal display (LCD) TVs, marketed under the AQUOS brand, said it expected a net profit of 50 billion yen for the current financial year to March 2011, unchanged from its previous forecast.

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