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Sony sees no light at tunnel end

SONY Corp reported its first annual net loss in 14 years and forecast a bigger loss this year, saying the pressure from sliding sales, competition in gadget prices and a strong yen was expected to continue.

The Japanese electronics and entertainment company yesterday said it lost 165 billion yen (US$1.72 billion) in the January-March quarter, compared to a 29 billion yen profit for the same period the previous year. That brought its full fiscal year loss to 98.9 billion yen.

Sony, which makes Bravia flat-panel TVs and Cyber-shot digital cameras, said it is closing three plants in Japan to help turn its business around. It is also in the midst of cutting 16,000 workers.

Sony said no quick recovery was in sight, projecting a 120 billion yen loss for the fiscal year through March next year.

It joins a string of other big Japanese corporations, including Toyota Motor Corp and Hitachi Ltd, that have announced huge losses and bleak outlooks.

Also yesterday, Sanyo Electric Co said it booked a net loss of 93.2 billion yen for the fiscal year, compared with a 28.7 billion yen profit the year before. It expects to turn a small profit of 7 billion yen this year.

Sanyo is being acquired by Panasonic Corp, which is also expected to announce dismal earnings today.

Analysts say Chief Executive Officer Howard Stringer, who decided to center power in his position earlier this year by also becoming president, has yet to announce details of a turnaround plan, including strategies and products.

Stringer, a Welsh-born American and the first foreigner to head Sony, has promoted four relatively young Japanese executives onto his managerial team.

Representing the company's gaming and electronics divisions, they aim to take advantage of Sony's sprawling empire to differentiate it from global rivals.

Sony is closing three plants in Japan by the end of December - for cell-phone cameras, video recorder parts and systems used for smart cards.



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