Page last updated at 11:31 GMT, Wednesday, 29 October 2008

Sony and Toshiba profits plummet

Profits are down at Sony and Toshiba despite innovative products

Two of Japan's biggest electronics giants, Sony and Toshiba, have suffered falling profits due to the global economic downturn and the strong yen.

Sony reported a 71% fall in net profit for the three months to the end of September, compared with the same period last year.

Toshiba actually made a net loss of 26.9bn yen (173m; $277m) as sales fell 7% in the third quarter.

For the same period last year, the company posted a profit of 25bn yen.

Sony's net profit for the quarter was 20.8bn yen, down from 71.8bn yen for the same three months last year. Sales were down 0.5% at 2.1 trillion yen.

Tough competition

The company slashed its full-year forecasts last Thursday, blaming the strong yen and tough price competition. It is particularly susceptible to currency fluctuations as 80% of the company's sales are outside Japan.

And worse could be to come, as the global economic slowdown continues to take its toll on sales. "The expectations being factored in are that Christmas sales will be considerably negative," said Nobuyuki Oneda, Sony's chief financial officer.

Troubles at the company's mobile phone joint venture, Sony Ericsson, have also contributed to the fall in profits.

Toshiba blamed "a recessionary phase" in the global economy for its continuing woes. For the six months to the end of September, it made a net loss of 38.4bn yen.

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