Sony: Poster child for a recession

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Sony's woes point to deeper Japanese malaise
Consumer electronics firms face tough year ahead

By Chris Oliver, MarketWatch


HONG KONG (MarketWatch) -- Japanese consumer electronics companies face mounting headwinds this year, with analysts forecasting few chances of an earnings turnaround soon as debt-laden consumers in their chief export markets tighten spending as the recession deepens.

Sony Corp. are both forecast to post operating losses for the fiscal year ending March 31, according to media reports Tuesday.

The outlook for Canon Inc., the world's largest digital camera maker, was also called into question after the chairman said year-end holiday sales were "disappointing" and he expected a difficult year ahead as the recession dampens consumer demand.

"I see no real evidence of a turnaround," said Uwe Parpart, chief Asia strategist with Cantor Fitzgerald in Hong Kong, referring to the sharp drop in Japanese exports.

"Consumption in the consumer electronics sector, like consumption overall, is dependant upon people being able to spend, and when they lose their jobs and have no prospects of getting it back soon, then consumption will suffer."

Data released Friday showed the U.S. economy shed a net 524,000 jobs in December, bringing to 1.9 million the number of jobs lost in the final four months of the year and lifting the unemployment rate to 7.2%. .........(more)

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