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TV production no longer the path to profit

Regional TV wars are continuing to put pressure on big Japanese firms, with Sony appearing to suffer more than most.

The electronics giant has cut its forecast for operating profits in 2012-13 to 130bn yen (just over £1bn), sharply down from the previously predicted 180bn yen.

Operating profits for April-June 2012 fell by a whopping 77 per cent to 6.28bn yen, compared with the same period last year.

This was a lot worse than analysts’ expectations of a 36 per cent fall.

In a statement, Sony blamed its situation on “uncertain foreign exchange rates and trends in the global economy”.

It added: “Sony is implementing various measures to help turn the television business, which is one of the key to revitalising our electronics business, to a profit in the fiscal year ending March 31, 2014.”

Sony’s new boss Kazuo Hirai, who took over in April from Sir Howard Stringer, has said he intends to revive the company by focusing more on game players, mobile devices and digital imaging.

Finances at Japanese rival Sharp are also gloomy, largely because of it heavy dependence on sales of TVs.

The company cited falling demand for LCD sets as one key reason for the operating loss of 94bn yen that it suffered in the April-June 2012 quarter.

Meanwhile, Panasonic has this year turned itself around from being a loss-maker to going into profit, as it seeks to scale back production of TVs and sell more white goods such as fridges and washing machines.

It seems that, amid fierce competition from South Korean and Taiwanese firms, the Japanese electronics giants are having to look beyond the now-common panel TV set to other sources of revenue to be profitable.

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