By JAY ALABASTER, Associated Press Writer

TOKYO – Sony said Thursday its net profit plunged 95 percent in the October-December quarter, as the holiday shopping season provided no respite for the struggling electronics giant and tepid sales of TVs, digital cameras and cell phones hit its bottom line.

The Japanese manufacturing icon said its usually dependable electronics division posted its first-ever operating loss in the fiscal third quarter. It also reiterated its forecast for a net loss of 150 billion yen ($1.67 billion) for the full fiscal year through March — its first loss in 14 years.

"From the second half of September last year, there has been a sudden deterioration in the economy, and with the effects of foreign exchange it has had severe consequences on our business," Chief Financial Officer Nobuyuki Oneda said.

Sony Corp. said its net profit shriveled to 10.4 billion yen ($115.6 million) in the third quarter from 200.2 billion yen a year earlier. Revenue fell 25 percent to 2.15 trillion yen from 2.86 trillion yen.

The quarter includes the year's peak shopping season and is usually a big one for its core electronics division, which generates over half of its total revenues with well-known products like Bravia TVs, Cyber-shot digital cameras and Vaio computers.

But sales of such products fell nearly across the board as consumers held back, and Sony's electronics division posted an operating loss of 15.9 billion yen, versus a 200.6 billion yen profit a year earlier.

The company has repeatedly warned of its troubled finances over the past few weeks, and the dismal numbers were in line with analysts' forecasts. But many said the weakness in electronics was a troubling sign, as the division has long been a source of steady profits, even as other areas struggled.

David Gibson, an analyst at Macquarie in Tokyo, pointed to a buildup in Sony's inventories as it failed to move its products.

"TVs really dragged them down during the period," he said.

The poor showing in electronics caused Sony's operating profit, which is generally seen as the best indication of a company's pure business performance but excludes taxes and other items, to fall to a 18 billion yen loss during the quarter.

Sony generates nearly 80 percent of its sales abroad, making it vulnerable to a strong yen, which cuts into its profits from overseas. The dollar has hovered near 90 yen in recent months after rising as high as 117 yen last year. So far this fiscal year foreign exchange movements have taken about 216 billion yen from Sony's operating income, the company said.

News from other big Japanese electronics exporters Thursday was also disappointing. Toshiba Corp. said it sank into the red in the third quarter and expects a loss for the full year, while game maker Nintendo Co.'s quarterly net profit fell 18 percent on the strong yen, forcing the company to reduce its full-year forecast.

Last week, Sony projected a 150 billion yen net loss for the full fiscal year, a reversal from a net profit of 369.4 billion yen last year. The last — and only — time Sony reported a loss, for the fiscal year ending March 1995, the red ink came from one-time losses in its movie division, marred by box office flops and lax cost controls.

Tokyo-based Sony has announced some restructuring measures, including cutting 8,000 of its 185,000 jobs around the world and shuttering five or six plants — about 10 percent of its 57 factories.

But Chief Executive Howard Stringer told reporters last week that he had not gone far enough with cut costs and would work harder to combine the company's diverse businesses, which also include its movie division and PlayStation game console business.

Sony also said that due to the poor economic conditions, it would postpone by a year establishing a joint venture with Sharp to make liquid crystal display panels for thin-screen TVs, and now aims to do so by March 2010.

The company's stock rose 4 percent Thursday to 1,909 yen. The results were announced after trading closed.

Spin much?

Eek. More bad news for Sony.

i guess you didnt read the article...?

still a much better report then i expected, though giving their guidance for the year, they must have moved losses into the 4th quarter. bet they are hoping for a recovery of the dollar/euro or a slide on the yen to reduce some of those losses.... thats a dangerous game

Ah, the fanboy wars...

don't you have better things to do with your life than trying to hurt some 12 year olds' feelings in this sony forum, Bubbs?

It feels like spin to me :P I remember people posting how much they assumed Sony was going to lose. Everyone on here had a quote for losses made. If Sony had reported that they only lost 400 million yen, people would be in utter shock and awe at the fact that they managed to lose so little.

But now that they post the most pathetic profit ever, people ramp up the doom and gloom meters even higher than they had it before in attempts to drag down those happy they managed to clear red at all :P With 2009 looking to be an overall decent year for it's SCE, I'll hope for the best for Sony ^^ Hopefully they can sort out they're electronics issues.

Don't you have anything better to do than react like a 12 year old with hurt feelings?

He is reporting NEWS.

Don't like it don't read it. This is primarily a website concerned with SALES afterall, sheesh!

Oh some of us aren't whining at all baggins :P Notice some of us are happy they posted a profit at all ^_^ People saying things like "Well they fell 95 percent, you shouldn't be happy" while company's all around the world managed nothing but staggering losses should be ashamed ;)

Well at least they stayed out of the red. But their stock rose? I dont really understand if thats good or bad