Sony profit up on digital cameras, games

Japan's Sony Corp. posted a six per cent rise in quarterly operating profit thanks to strong digital camera sales, but it cut its annual outlook.

Sony enjoyed robust holiday demand for its Cyber-shot digital cameras, Handycam camcorders and Vaio personal computers. But a slowdown in the US economy and a firmer yen have raised investor concerns over its earnings prospects.

Its game business swung to a profit after Sony cut production costs and retail prices of the PlayStation 3 game console and broadened its game software line-up in a bid to catch up with Nintendo Co. Ltd's Wii and Microsoft Corp's Xbox 360.

For the year to March, the company cut its operating profit forecast to $3.9 billion from 450 billion yen, compared with the consensus of 446.9 billion yen in a poll of 22 analysts by Reuters Estimates.

Sony, which vies with Samsung Electronics Co. Ltd and Sharp Corp in flat TVs, has shed 10,000 jobs and a wide range of non-core assets over the past few years in a turnaround effort led by chief executive officer Howard Stringer. The Tokyo-based company said last year it would sell its production facilities for making key microchips used in the PS3 to Toshiba Corp. and stop making rear-projection TVs, once seen as a promising rival of LCD and plasma models.

Operating profit came to 189.36 billion yen in October-December, up from 178.91 billion yen a year earlier. Net profit rose 25 per cent to 200.22 billion yen.

Prior to the announcement, shares in Sony closed up 3.6 per cent at 5,220 yen, outperforming the Tokyo stock market's electrical machinery index , which rose 2.7 per cent.