Sony sees first loss in 14 years

Demand for Sony products is being hit by the downturn.

Electronics giant Sony has said it is going make its first annual loss in 14 years as the global economic slowdown hits demand for its products.

For the financial year ending in March, Sony said it expected to make a net loss of 150bn yen ($1.7bn, £1.2bn).

The company also blamed a strong yen for making its exports more expensive.

Sony had forecast as recently as October that it would make a profit this year. The expected loss was much bigger than analysts had anticipated.

Last year, Sony made a profit of 369.4bn yen, but its fortunes have changed as the global downturn has hit home.

Currency fluctuations

In October, it cut its profit forecast in half and shortly after announced it would lay off 8,000 employees and shut some manufacturing plants.

Sony is particularly sensitive to currency fluctuations since about 80% of its sales come from overseas.

The yen is at a 13-and-a-half-year high against the dollar, which has eroded Sony's foreign earnings.

Other electronics firms are also suffering.

South Korea's LG Electronics, which makes handsets and home appliances, reported its first loss in almost two years earlier on Thursday.

It said it made a net loss of 671.3bn won ($490m; £350m) in the last three months of 2008.

But the gloom in the technology sector is not all-encompassing.

Apple said on Wednesday that made a record quarterly profit of $1.61bn (£1.15bn) in the final three months of last year, boosted by sales of iPhones and iPods.