Sony braces the market for further losses

SONY Corporation forecast a second straight year of losses as the global recession battered demand for consumer electronics.

But the Japanese company stopped short of taking any new aggressive steps to cut costs further. Sony, which competes with Samsung Electronics in LCD TVs and Canon in digital cameras, forecast an operating loss of 110 billion yen (£750m) for the business year to March 2010.

Sony, led by Welsh-born chief executive Sir Howard Stringer, also said it suffered a £685m loss last year.

The back-to-back annual losses will be Sony’s first since its listing in 1958, underscoring deepening troubles for a company that has fallen behind Apple’s iPod in portable music, Nintendo in videogames, and is losing money on flat-screen TVs.

Japanese companies have suffered an additional blow as the yen’s strength made their products less price competitive overseas.

Sony said yesterday it would close a number of its 57 manufacturing sites this year and stood by its plan to slash more than £2.1bn in costs this financial year.

Analysts said the firm should turn its attention to how it plans to take advantage of an economic recovery.