Sony profits plunge

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Japanese consumer electronics giant Sony has reported a 94% plunge in profits for the second quarter of 2006. The sharp decline is attributed to the cost of recalling potentially faulty PC batteries and developing the new PlayStation 3 games console.

The company reported that profits had fallen to ¥1.7bn (£7.6m) for the quarter compared to ¥28.5bn (£127m) for the same period last year.

Its gaming division saw a sharp loss of ¥43.5bn (£192m) due to extra costs related to the PS3, which goes on sale in Japan next month but will not be available in Europe until March. The delay is due to supply problems with the console’s Blu-Ray disk drive.

The losses were offset by a slight increase in sales during the quarter with increased demand for flat-screen TVs.

According to Brand Index tracking data, Sony’s brand reputation has so far stood up fairly robustly to the continuing pressure coming from the costly battery recall.

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