Sharp, Sony Shares Tumble in Tokyo on Forecast Cut

Sharp Corp. (6753) plunged the most in more than three decades and Sony Corp. (6758) declined in Tokyo trading after the Japanese consumer-electronics makers slashed full-year forecasts amid slumping demand for televisions and a strengthening yen.

Sony, Japan’s biggest consumer-electronics exporter, dropped by as much as 8.2 percent and Osaka-based Sharp by as much as 25 percent, its most since at least 1974. American Depositary Receipts of Sony tumbled in New York trading yesterday.

Sharp, the maker of Aquos TV models, forecast an annual loss of 250 billion yen ($3.2 billion) yesterday as demand for its Aquos TVs slumped while Sony reduced its full-year net income forecast by a third to 20 billion yen. Sharp also announced its first layoffs since 1950s as Japan’s electronics makers shed staff to return to profit amid competition with Samsung Electronics Co. and Apple Inc.

“I can’t be bullish on the Japanese consumer electronics makers,” said Ichiro Takamatsu, a fund manager at Tokyo-based Bayview Asset Management Co., which manages $2 billion. “I want to know whether this is the beginning of the end. It will take time and I don’t see any promising products enough to spur their sales.”

Sony traded at 893 yen and Sharp at 200 yen while Japan’s benchmark Nikkei Index was down 1.4 percent. In early trade, Sharp’s sell offers outnumbered buy bids at about 6-to-1.

Sharp had a net loss of 138.4 billion yen in the three months ended June 30, widening from 49.3 billion yen a year earlier, the company said. The average of four analysts’ estimates compiled by Bloomberg was a loss of 76 billion yen.

Credit Suisse Group AG and JPMorgan Chase & Co. downgraded their ratings on Sharp while Barclays Plc analyst Yuji Fujimori cut his target price for Sony 8 percent to 1,100 yen.

Net income at Sony, the maker of Walkman music players, will probably be 20 billion yen in the year ending March 31, the Tokyo-based company said yesterday, lowering its May projection of 30 billion yen. Sony cut its sales projections for TVs, handheld game players, compact cameras and personal computers.

To contact the reporters on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net; Mariko Yasu in Tokyo at myasu@bloomberg.net.

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net