Japan tech giants see earnings dive

Sony, Toshiba and Nintendo all report plunging profits as financial crisis hits global sales.

    Sony has forecast that it will report its first annual loss in 14 years [GALLO/GETTY]

    The Tokyo-based electronics company reported a net loss of $1.36 billion for the October-December quarter, down from $900m profit in the same period the year before.

    Games console maker Nintendo said it too had seen its profits fall, despite the popularity of its Wii console and DS handheld device.

    The Kyoto-based company said profit for the first nine months of the fiscal year had fallen by 18 per cent, as a strong yen cut into demand for its gaming products.

    'Double whammy'

    The tech industry is one of the pillars of Japan's export-dependent economy, which is second in size only to the US.

    But the sector has been hit hard by plunging demand at home and in key markets such as the US and European Union.

    Martin Williams, Tokyo bureau chief of tech newswire IDG, said that like other Japanese exporters, the tech sector had been hit hard by the "double whammy" of plunging global demand and the growing strength of the Japanese yen.

    Sony's latest earnings data released on Thursday show that biggest hit was to its core electronics division, which makes some of its best known brands such as Walkman music players and Bravia flat panel  TV sets.

    The division has long been seen as a dependable source of profit but saw a $178m operating loss during the October-December quarter - a period that includes the Christmas shopping season, which is usually a boon for electronics sales.

    Sony has already announced some restructuring measures, including cutting 8,000 of its 185,000 jobs around the world and shutting production at about 10 per cent of its factories.

    SOURCE: Agencies


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