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Sony shares fall to 32 year low as future plans are labeled 'optimistic'

Sony shares fall to 32 year low as future plans are labeled 'optimistic'

May 11, 2012 | By Mike Rose

May 11, 2012 | By Mike Rose
More: Console/PC, Business/Marketing

Analysts have said that Sony's forecast for a swing to profits in the current fiscal year is "optimistic", as the company's shares today fell by 7 percent to a 32 year low following record fiscal 2011 losses.

Sony this week posted record losses for the last fiscal year, due in part to its declining video game business, although it estimates that it will swing to profits during the current fiscal year.

This swing will be fueled in part by halved losses in its TV business, as well as improved sales for its PS Vita handheld, said the company. Sony estimates that it will sell 10 million PS Vitas during the current fiscal year.

However, speaking to Reuters, Goldman Sachs analysts said that weak demand for console and handheld games, as well as fierce competition from smartphone games, means that Sony's profit improvement plans for this year are misguided, even taking into account the planned loss narrowing in its TV business.

Deutsche Bank analyst Yasuo Nakane noted, "We see no catalyst that might spur a sustained (share) rally," while a trader at a U.S. bank added, "I didn't see anything positive in (Sony's results). There's really nothing in there that can justify buying the stock."

Sony's stock hasn't been this low since 1980, when its first Walkman portable cassette player launched. In 2012 alone, Sony's market value has tumbled by $3 billion.

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