Sony Corp and LG Electronics Inc stunned investors on Thursday, warning of big losses, underlining the deep pain in the consumer electronics market as demand crumbles in a brutal global downturn.
Japan's Sony, maker of Bravia flat screen televisions, Cyber-shot digital cameras and PlayStation game machines, said it would post a bigger-than-expected $US2.9 billion operating loss this business year due to sliding demand, a stronger yen and as it restructures its ailing electronics operations.
Consumer demand for gadgets has slumped as the financial crisis has grown into a broad recession that has already engulfed the United States, much of Europe and dampened demand in once-resilient emerging markets.
As inventories pile up and prices tumble, Sony is feeling the pinch across its operations - from semiconductors to movies and insurance.
Analysts say the group, which generates two-thirds of its revenue outside Japan, needs to take more drastic steps.
Sony's grim warning came as Japanese exports plunged by a record amount in December and China's economy slowed sharply in the fourth quarter as recession in rich nations hammered the demand that helps drive Asia's top two economies.
Sony competes with Samsung Electronics in TVs, Canon Inc in cameras, and Microsoft Corp and Nintendo in video games.
In December, Sony said it would cut 16,000 jobs, curb investment and pull out of some businesses to slash $US1.1 billion in annual costs.
Adding to the gloom, South Korean mobile phone and appliance maker LG Electronics posted a record quarterly net loss, hit by big shortfalls at its flat-screen affiliate and weak mobile phones.
LG forecast a grim 2009 outlook, saying its sales will decline and profits worsen due to slumping demand and increasing competition, sending its shares down almost 4 percent.
The firm reported a 671.3 billion won ($US489.7 million) net loss for October-December, much worse than a consensus forecast for a 172.3 billion won loss.