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Sony stock stiffs on limp earnings

Friday, 1st February 2008 16:07 GMT By Patrick Garratt

While Sony’s games division may have gone into the black, a small rise in profit and a cut outlook in recent quarterly financials damaged the company’s shares to the tune of 7 percent today, says this.

“The earnings report prompted HSBC to cut its rating on Sony to ‘neutral’ from ‘overweight’, citing the risk that a weakening U.S. economy and the strengthening yen could sap future profits at the maker of PlayStation 3 game consoles and Vaio PCs,” said the report.

Jubilation in the games trade met the news that Sony’s PlayStation division had finally turned a profit earlier this week, and any dip is already being seen as short-lived.

“Investors appear to be overselling Sony,” said Koichi Ogawa, a chief portfolio manager at Daiwa SB Investments. “Maybe this presents a buying opportunity for the stock as, if you take a step back and see, Sony has started making profits on its game business.”

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