Lower demand and prices to hit Sony's results
- 21 January, 2005 11:07
Sony has revised the financial outlook for its current fiscal year, cutting estimates for sales and operating income, but raising its estimate for net income.
The company said it expects sales and operating revenue for the year to March 31 to be about $US69.6 billion, operating income to be about $US1.06 billion and net income to be about $US1.45 billion.
The downward revision in sales and operating revenue, which had previously been forecast to be $US71.1 billion, and operating income, previously predicted to be $US1.55 billion, was blamed on lower demand and greater competition in several key sectors of Sony's electronics business.
Competition in the portable audio market and a greater than anticipated drop in the selling price of several products - including televisions, DVD recorders and video cameras - were partly to blame, Sony said.
Demand for semiconductor products was also lower, the company said.
The revised net income forecast is an upward revision from the previous target of $US1.06 billion and has been realised because Sony expects its income tax bill in the US will be lower than expected. The tax bill will fall because Sony will reverse $US660 million of valuation allowances held against deferred tax assets. The reverse is being made because of improved business conditions at some of its US units.
The company did not specify which units these are.