quote:

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> http://www.bloomberg.com/apps/news?
> pid=20601101&sid=a4Jrqd8sIuJc&refer=japan
>
> Jan. 29 (Bloomberg) -- Sony Corp., the world's largest maker of video-
> game players, may report third-quarter profit fell 50 percent after
> its flagship PlayStation 3 lost market share to Nintendo Co.'s Wii.
>
> Losses from games probably drove net income down to 84.1 billion yen
> ($691 million) in the three months ended Dec. 31, from a record 168.9
> billion yen a year earlier, according to the median estimate of five
> analysts surveyed by Bloomberg. Sales at Tokyo-based Sony, which
> reports earnings tomorrow, probably rose 9.6 percent to 3 trillion
> yen.
>
> The results may highlight Chief Executive Officer Howard Stringer's
> failure to fend off Nintendo, whose $250 Wii console outsells the
> PlayStation 3 by two-to-one. Sony may still exceed its full-year
> profit target because of a weaker yen, sales of Bravia televisions and
> growth at its movie unit.
>
> ``A drop in third-quarter results is largely expected on the games
> division. There's no surprise unless the company further reduces its
> profit forecasts,'' said Mitsushige Akino, who oversees $468 million
> in assets at Ichiyoshi Investment Management Co. in Tokyo. Akino
> doesn't recommend investors buy Sony stock ``until the company
> improves its earnings.''
>
> Sony in October cut this fiscal year's profit forecast to a five-year
> low of 80 billion yen after delays in the new PlayStation's debut and
> a recall of defective laptop batteries, the largest in consumer
> electronics history.
>
> Shares of Sony have risen 9.6 percent in the past six months, trailing
> the 61 percent gain by Nintendo and Xbox 360-maker Microsoft Corp.'s
> 26 percent increase. Today, Sony's stock fell 1.2 percent to close at
> 5,730 yen in Tokyo.
>
> Wii Wins
>
> The game division, Sony's second-largest by revenue, probably lost
> 50.9 billion yen during the quarter, compared with a profit of 67.8
> billion yen a year earlier, after sales fell 7 percent, according to
> the Bloomberg survey.
>
> After botching the PS3's debut with production delays and cutting the
> price to compete against cheaper Wii and Xbox players, Sony will
> probably lose a record 191.9 billion yen from games this fiscal year,
> compared with profit of 8.7 billion yen the previous year, according
> to the Bloomberg survey.
>
> Nintendo, the world's largest handheld game maker, last week reported
> profit in its latest quarter jumped 40 percent to 77.6 billion yen,
> fueled by demand for Wii consoles and portable DS game players.
>
> In the U.S., Nintendo sold 1.1 million consoles in November and
> December, almost double the PlayStation 3 units shipped during the
> period, according to researcher NPD Group. In Japan, Nintendo sold
> 989,118 Wii units last year, more than double PlayStation 3 sales,
> according to researcher Enterbrain Inc.
>
> TVs Help Stringer
>
> Redmond, Washington-based Microsoft last week cut its Xbox 360
> forecasts and now expects to sell 12 million units by June 30, instead
> of 13 million to 15 million. The company sold 10.4 million units of
> the console since its December 2005 debut, exceeding Microsoft's own
> 10 million target.
>
> Even so, Sony's overall profit this fiscal year may beat its own
> forecast from sales of Bravia LCD TVs, Vaio computers and Cyber-shot
> digital cameras, the analysts said.
>
> The company will probably post net income of 122.1 billion yen this
> fiscal year, 53 percent higher than the company's October forecast,
> the survey showed.
>
> Profit at the consumer electronics division, the world's second-
> largest behind Panasonic-maker Matsushita Electric Industrial Co.,
> probably increased 23 percent to 97 billion yen as revenue rose 9.4
> percent to 1.75 trillion yen, according to the survey.
>
> Sticking to Profit Pledge
>
> Profit from cell-phone unit Sony Ericsson Mobile Communications Ltd.,
> which this month reported profit tripled in the latest quarter, also
> helped ease losses from the game division, according to the analysts.
>
> The business, which posted a loss last fiscal year, will generate
> 152.3 billion yen in profit this fiscal year, almost double overall
> operating income, according to the survey.
>
> TV sales helped Stringer, 64, say at this month's Consumer Electronics
> Show that he's sticking to a pledge when he became chief executive in
> 2005, to increase Sony's profit margin to 5 percent by March 2008. The
> company had a 2.6 percent margin last fiscal year.
>
> Sony and partner Samsung Electronics Co., the world's two biggest LCD
> TV makers, sell most of the sets sized 40 inches and above, according
> to researcher DisplaySearch.
>
> The movie studio business probably posted a profit of 24.9 billion
> yen, from a loss of 400 million a year earlier, according to the
> Bloomberg survey.
>
> James Bond, Spider-Man
>
> Profit at the division will probably jump 73 percent this fiscal year,
> according to the survey, after Sony had a record 13 films open at No.
> 1 and led all other studios in U.S. ticket sales with films such as
> ``The Da Vinci Code'' and ``Casino Royale'' during 2006.
>
> Movies such as ``Spider-Man 3,'' due for release in May, will probably
> help drive up profit, CLSA Asia-Pacific Markets analysts Atul Goyal
> and Sandeep Muthangi said in a Jan. 24 report.
>
> Profit from financial services, including life and auto insurance,
> probably fell 63 percent to 17.5 billion yen and sales declined 11
> percent to 169.5 billion yen, the survey showed.
>
> The division's profit fell because of lower stock gains after the
> Nikkei 225 Stock Average's climb slowed to 6.8 percent during the
> quarter, Credit Suisse Group analyst William Drewry wrote in a Jan. 22
> report. A year earlier, the index surged 19 percent, its fastest
> quarterly growth in a decade.
>
> The company plans an initial public offering of Sony Financial
> Holdings Inc. as early as the year beginning April 1, according to
> spokeswoman Kayoko Miyako, who declined to comment on the size of the
> offering.
>
> Sony may raise 300 billion yen to 400 billion yen in an IPO of the
> unit in July or August and may disclose the timing of the offer
> tomorrow, Macquarie Research Equities analyst David Gibson wrote in a
> note to clients on Jan. 17. The funds may be used for a stock buyback,
> benefiting investors, he said.
>
> The following is a summary of earnings that analysts are predicting
> for Sony's third quarter and fiscal year ending March 31. Figures are
> in billions of yen.