Sony Profit Forecast Drops 39% Due to Battery Recall, Sluggish Sales

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Sony Cuts Annual Profit Forecast by 39 Percent After Laptop Battery Recall [Bloomberg]

Summary: Sony announced yesterday that Q2 profit fell 93% from last year's 28.5 billion yen to 2 billion yen. The company also cut its full year net income forecast to 80 billion yen, down from 130 billion yen. The company is struggling with a massive laptop battery recall as well as PlayStation 3 delivery delays and price cuts, in addition to sluggish sales for its PlayStation Portable machines. The battery recall is expected to cost the company 51 billion yen, though it's not clear whether that will be enough to cover all costs.
Related links: Is the Worst Over for Sony's Stock? • Consumer Electronic Companies May Seek Damages for Battery Recall • Sony Spin Factor • Reuters: Sony CFO: expects big profit improvement in 07/08 • Bloomberg: Sony Forecasts Lowest Profit in Five Years on Recall, PS3 Price
Potentially impacted stocks and ETFs: Stocks: Sony: (SNE), Toshiba (TOSBF), MSFT (MSFT), Ninetendo (NTDOY). ETFs: BLDRS ASIA 50 FD (ADRA)

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