Sony reported a 47 per cent drop in quarterly net profit on Tuesday and cut its full-year earnings forecast, hit by a sharp slowdown at its Sony Ericsson mobile phone business.

The Japanese electronics and entertainment group said it earned Y35bn in the April-June first quarter, down from Y66bn in the same period last year. The company now projects a net profit of Y240bn for the 12 months to next March, Y50bn less than it previously forecast.

EDITOR’S CHOICE

Sony sets 150m sales target for PS3 - Jul-20Lex: Sony disappoints - Jun-27Sony plans $18bn BRIC push - Jun-26New generation of adverts for Sony’s PS3 - Jun-04Sony plays it simple in battle with Xbox - May-07Grand Theft Auto sells 6m in first week - May-07Sony Ericsson, a joint venture between Sony and Ericsson of Sweden, said this month it would cut up to 17 per cent of its workforce as it reported a 98 per cent fall in quarterly pre-tax profit.

Its high-end phones have been outsold by cheaper models from Nokia and other rivals, with sales falling even in burgeoning handset markets in Asia.

The problems at Sony Ericsson have overshadowed improvements at Sony’s loss-making video game and television businesses, which Sir Howard Stringer, chairman, has pledged to make profitable this year.

A rise in the yen has also hurt the company, which generates the majority of its revenues abroad, by reducing the value of overseas sales in home-currency terms.

Sony raised its operating-profit forecast for the full year to Y470bn to Y450bn to reflect a change in the way it accounts for earnings at affiliates. Its quarterly operating profit fell 40 per cent, however, to Y73bn.

Source:ft.com