Sony shares hit three-decade low

Shares in Sony Corp slumped more than seven per cent to near 32-year lows, as investors doubted the Japanese consumer electronics giant has a strategy to fix its loss-making TV business and compete in the smartphone market against Apple and Samsung.

Yesterday the maker of Bravia TVs, Vaio laptops and PlayStation games consoles posted a record annual loss of $5.7bn (£3.5bn), but forecast a first profit in five years as it looks to halve losses at its ailing TV business.

The last time Sony shares were this low, in the summer of 1980, its first Walkman portable cassette player had just gone on sale in the United States. So far this year, Sony has seen more than $3bn (£1bn) wiped off its market value.

Sony’s new chief executive Kazuo Hirai has said Sony will sell more than 33m smartphones this business year, up from 22.5m last year, and will more than double sales of its portable game players, including the PlayStation Vita, to 16m. Analysts, though, point to weak demand for game players in major markets and fierce competition in smartphones.

“In our view, guidance for profit improvement in digital cameras, games, li-ion batteries and smartphones looks optimistic and we see downside risk,” Goldman Sachs analysts wrote in a client note, keeping their ‘sell’ rating on the stock. “We think TV losses may be smaller than the company forecasts … but we see significant downside risk to overall guidance.”