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Sony Shares Plunge Anew on Dimmed Profit Outlook

July 31, 2001|KEIKO KAMBARA | BLOOMBERG NEWS

Sony Corp. shares led the Japanese stock market lower Monday, tumbling 7% to their lowest level since June 1999, after the second-largest consumer-electronics maker slashed its annual profit forecast last week.

In Tokyo, Sony's shares fell 430 yen to 5,830 yen. That followed an almost 12% drop Friday, their biggest one-day decline in more than a decade.

On the New York Stock Exchange, Sony's American depositary receipts (ticker symbol: SNE) plunged $5.50, or 11%, to $46.40 on Monday. The stock peaked at about $150 in March 2000, with the overall peak in technology shares worldwide.

Sony on Thursday reported a net loss of $243 million for the three months ended June 30 and cut its fiscal year profit forecast by 40%. The company also said it will slash total spending by 25% this year.

The results underscore mounting troubles at electronics makers in Japan amid signs the second-largest economy is back in recession barely two years after the last one ended. Global demand also is waning for everything from mobile phones to computers, curbing earnings for Sony and its peers worldwide.

However, Sony's entertainment group, led by Columbia Pictures, has fared better than expected recently, thanks in part to the film "Crouching Tiger, Hidden Dragon."

Nonetheless, Sony's downbeat assessment of its outlook has prompted some analysts to downgrade the stock, adding to selling pressure.

Nomura Securities Co., Merrill Lynch Japan and Societe General Securities all have cut their ratings on the shares in recent days.

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