Sony shares drop on loss news

<p>Sony has announced a loss in its latest results.</p>

The share price of Sony has fallen today (February 6th), following the company's announcement in its latest financial results that it has made a loss.

Sony previously forecast that it would make a considerable profit for 2013, but the firm stated that it now expects to report a full-year loss of 110 billion yen (£665 million).

Forecasts for its financial year to the end of March were downwardly revised by the company despite it reporting a profit of 27 billion yen for the final quarter of last year.

A favourable exchange rate was highlighted by the firm as one of the reasons for its improved performance in the last three months. When the yen is weak compared to other major global currencies such as the dollar, this helps exporters in Asia such as Sony.

Credit rating cut

Moody's reduced the Japanese firm's credit rating to junk status last month and stated that it expected earnings from Sony's core businesses to face "significant" downward pressure. The firm's TV and PC businesses were both highlighted as areas of concern by the agency, which stated that Sony faced "intense" global competition from rival companies in these sectors.

Stocks in the company fell by 1.24 per cent on the New York Stock Exchange as a result of its latest financial forecast, in which the firm stated that it will try to sell its Vaio PC business.

PC sales have been plummeting in recent years as members of the public instead look to use smartphones and tablet computers, which have caught the imagination of individuals due to their excellent portability.

Many of the world's biggest TV manufacturers have also been struggling with this area of their business in recent weeks, with Sony indicating it is planning to cut back on this part of the company. Instead, the firm could look to focus on innovations such as its latest games console, the PlayStation 4, which was released in the autumn.

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