Sony Shares Fall 9% After Japan Earthquake, Tsunami
3:35 AM PDT 3/15/2011 by Jonathan Landreth
The widening disaster has caused the electronics giant to revise down its full-year forecast.
BEIJING – Shares of Sony Corp. tumbled 8.86% on Tuesday in Japan, following steeper market losses in the wake of the 9.0-magnitude earthquake and tsunami that last week shook the world’s third-largest economy to its core.
Shares of Sony, parent company of Sony Pictures, closed at 2,324 yen ($28.45) on the Tokyo Stock Exchange, dropping nearly as much as the nine percent lost Monday as investors added the closure of several factories and a likely slowdown in domestic sales to a poor annual profit forecast. Monday, the same day the company said its net income for the 12 months ending March 31 would be $535 million -- less than half that expected by 19 analysts polled by Bloomberg. Sony also said it had closed for repairs its quake-damaged Sendai Technology Center on Japan’s tsunami-ravaged northeast coast. This followed the announcement Sunday that due to widespread nationwide power outages, Sony also had closed temporarily six other electronic component and equipment plants in other parts of the country. Analysts said that short-term revenues at Sony could fall by as much as 10 % if domestic sales drop as the nation turns from entertainment to mourning and recovery. Japan is the number two market for Hollywood films in the world. Domestic purchases account for 9% of Sony’s total sales of the Playstation gaming console and 11% of the total sales of the company’s Bravia televisions. Sony’s losses Tuesday trailed a 10.6% drop in Japan’s broader Nikkei Index -- which closed at 8,605.15 -- its biggest drop since the global financial crisis of 2008. In New York on Monday, Sony’s shares dropped 7.1% in U.S. stock market trading, to close at $31.08 each as American investors mulled the fallout from the natural disasters that Prime Minister Naoto Kan called Japan’s worst crisis since World War II. In the last year, U.S. shares of Sony have traded between $25.85 and $40.45. -- Reuters contributed to this report.
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