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Last Updated: Thursday, 28 July 2005, 12:52 GMT 13:52 UK
Price falls push Sony into loss
Visitors at the launch of the PlayStation portable games machine
Sony is due to unveil a restructuring plan in September
Electronics giant Sony has tumbled into the red, hit by falling prices for its televisions and DVD recorders.

The Japanese group reported a net loss of 7.3bn yen ($65m; 37m) for the three months to June, compared with profits of 23.3bn yen last year.

Sony said it was also slashing its full-year profit forecast to 10bn yen, from a previous estimate of 80bn yen.

The loss followed poor earnings figures from Japanese peers Toshiba, NEC and Hitachi, who also reported losses.

'Severe' conditions

Toshiba, the world's biggest manufacturer of microchips, reported a net loss of 8.9bn yen for the three months to June, while NEC reported a net loss of 10.9bn yen, on falling sales of chips used in mobile phones.

Meanwhile, Hitachi reported a net loss of 24.1bn yen in the quarter, from a net profit of 16bn yen a year earlier.

"Overall, our business condition is severe," said Hitachi's senior vice president and chief financial officer, Takashi Miyoshi. "We expect the price competition to get heated."

Matsushita Electrical Industrial - the maker of Panasonic products - and computer firm Fujitsu bucked the trend, reporting net profits of 33.4bn yen and 2.5bn yen respectively.

Matsushita said a recently introduced cost-cutting drive had enabled it to avoid the impact of falling prices.

Foreign boss

Sony said it had also been hit by slowing sales for its market-leading PlayStation games console and reduced demand for image sensor chips used in digital cameras.

In March, Sony appointed UK-born Sir Howard Stringer - the former head of its US operations - as the first foreign group chairman in its 59-year history

The move came just a few weeks after Sony issued a profits warning for its vital electronics division.

Sir Howard's new management team is due to unveil a restructuring plan for Sony in September.

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