Merrill Lynch Still Hates Sony, Estimates Huge PS3 Losses

| About: Sony Corporation (SNE)
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Merrill Lynch (MER), perhaps the biggest Sony (NYSE:SNE) hater, downward revised its financial forecast and cut its target share price today. ML also estimated a multi-billion dollar 5-year total operating loss related to the PlayStation 3.

FISCO news service of Japan reported on the ML analyst report. Details of the downward revised financials were not provided.

Target share price revision: ¥4,700 --> ¥4,000 ($40.05 --> $34.09 at ¥117.35/US$1)

Total PS3 operating loss expected over 5 years: ¥738.9 billion ($6.3 billion at ¥117.35/US$1)

The PS3 goes on sale in Japan tomorrow, but there will be extremely tight supplies. A quick sellout will likely make headlines, but doesn't mean much since there will reportedly be only 80,000 units for sale, after a recent 20% cut from 100,000 units. The PS2 sold nearly 1 million units in Japan in the three days following its launch in 2000.

The PS3 launches in the U.S. on the 17th with an available supply of around 400,000 units, although stores have reportedly sold-out of pre-orders.

Sony's CFO recently confirmed the firm still plans to sell 6 million PS3s by the end of next March.

Sony's ordinary shares (Tokyo: 6758) lost 1.48% today to close at ¥4,670 ($39.80 at ¥117.35/US$1). Its ADRs lost 2.71% yesterday, closing at $39.84.

Related: Sony Q206 earnings conference call transcript • Seeking Alpha coverage of Sony • Seeking Alpha coverage of Game Consoles

Sony Corp (SNE) 1-year chart:


Disclosure: The author does not own shares of any companies mentioned in this article.