Sony shares slump as smartphones and PlayStation sales struggle – business live | Business

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Sony’s slogan, “Be Moved”, is inspired by the emotional impact of technology, and the power of smartphones, gaming devices, cameras and speakers.

Unfortunately, the only thing being moved right now is Sony’s share price, which is tumbling after the electronics giant became the latest tech company to warn that conditions are deteriorating.

Sony spooked investors by cutting its sales outlook for the year, warning that demand for smartphones in Japan, Europe and East Asia was weaker than expected. It also warned that sales for its camera business will probably miss forecasts, due to disappointing demand.

In another blow, profits at Sony’s gaming business fell 14%. Sales of its flagship PlayStation 4 (PS4) gaming console dropped to 8.1 million units in the last quarter, down from 9 million a year ago.

Although Sony insisted this was in line with forecasts, analysts are worried that the company’s gaming division – a key source of profits – is cooling.

As Leo Sun of The Motley Fool put it:

“Investors are disappointed with Sony’s declining operating profits at its core gaming division.”

Overall, Sony lowered its sales outlook for the current financial year (to March) to 8.5 trillion yen, from 8.7 trillion yen.

Operating profit is expected to come in at 870 billion yen, compared with analysts’ projections for 884 billion yen on average, according to estimates compiled by Bloomberg.

Traders hammered the sell button, sending Sony’s shares down 8% today – the biggest fall since 2015.

Sony’s share price

Sony’s share price Photograph: Refinitiv

As one of the world’s largest consumer electronics companies, Sony is an important bellwether of the global economy.

Chief financial officer Hiroki Totoki certainly gave us reasons to worry. He warned that the smartphone market was suffering from a “harsh business environment”, citing geopolitical tensions and China’s slowing economy, adding:

We cannot be too optimistic about the future since several macroeconomic and geopolitical risks have emerged since the second half of last year, including the smartphone market.”

David Buik

SONY shares drop 8% this morning – numbers were light & the outlook for sales of games, cameras and phones considered not very encouraging!

February 4, 2019

Also coming up today

World stock markets are making a slow start to the new week. After strong US jobs figures last Friday, investors are wondering whether the US economy is in stronger shape than expected.

The FTSE 100 is expected to open flat, after ending last week at a two-month high of 7020 points.

On the economics front, we get a health-check on Britain’s building sector. Economists predict that Markit’s monthly construction PMI will show slowing growth (dipping to 52.5 from 52.8).

Plus, new durable goods sales figures from the US

The agenda

9.30am GMT: UK construction PMI for January

3pm GMT: US durable goods orders for November

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