Sony announces unexpected losses

Sony has reported an unexpected loss in the first three months of this year, but predicted better-than-expected profits for the rest of the year.

The downturn was largely due to the falling stock markets, which forced Sony's financial unit to post losses.

Sony reported operating losses of 4.7bn yen ($45m; £23m), which was better than the 113.4bn yen loss in the same period of 2007 but a profit had been expected.

It predicts a 450bn yen profit for the year to the end of March 2009.

Japanese exporters such as Sony have been struggling as the strength of the yen against the US dollar makes their products more expensive overseas.

For the year to the end of March, operating profit grew five times to 374.5bn yen, which was short of its January forecast of 410bn yen.

Much of the improvement was a result of the previous year having to absorb launch costs for the PlayStation 3.

"While Sony missed its targets, the main factors that hit its numbers were financial, such as charges on convertible bond appraisal losses and other factors unrelated to its core operations," said Kazuharu Miura of Daiwa Institute of Research.

"In electronics and games, Sony looks to have been pretty much on target."

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