YURI KAGEYAMA
Sony's shares plunged yesterday amid reports that the Japanese electronics maker was sinking into its first yearly operating loss in 14 years.
The reports, just weeks after Toyota forecast its first annual operating loss in 70 years, highlight the pain even Japan's leading brands are suffering amid the global slowdown.
The nation's top business daily, The Nikkei, said yesterday that Sony was expected to rack up a 100 billion yen (£769m) operating loss this fiscal year, its first since 1995.
Behind the dismal outlook are faltering sales of LCD TVs and other goods, especially in the key US and European markets, The Nikkei said.
Tokyo-based Sony declined to comment.
The last - and only - time Sony racked up an operating loss, for the fiscal year ending March 1995, the red ink came from one-time losses in its film division, marred by box office flops and ineffective cost controls.
Sony has already taken some dramatic steps. Last month, it said it would implement cost-cutting to ride out the slump, including slashing 8000 jobs, or about 4% of its work force, lowering spending and shutting plants.
In its heyday of the 1980s and 1990s, Sony was seen as an innovator with its Walkman portable player and PlayStation video game machine.
However, it has seen its brand power gradually lose its lustre in the face of rivals not only from Asia but also from the West, such as Apple's iPod.
Like other electronics makers, Sony has also had to battle plunging gadget prices.
Even products boasting costly technology have slid in price amid intense competition.
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