Sony Earnings Tank As Nintendo Soars

Sony on Thursday reported that its profit dropped 95 percent for its third quarter ending Dec. 31, which includes the first-ever operating loss from its electronics division. Sony executives also forecast a loss of $1.67 billion for the fiscal year ending March 31, which will be the company's first loss in 14 years, according to Reuters.

"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," said Sony CFO Nobuyuki Oneda.

Sony CEO Howard Stringer told reporters last week that Sony would "have to move in a hurry" to right its ship. The company has shed about 10,000 jobs in the past three years and announced in December it would cut 16,000 more.

Despite cutting its own annual outlook by 16 percent, Sony rival Nintendo had a much cheerier day, posting a 21 percent rise in operating profit for its third fiscal quarter ending Dec. 31. Nintendo attributed the bump to strong holiday sales of its Wii consoles and DS handheld players, but analysts cautioned anyone ready to pop the champagne. Nintendo has also slightly lowered sales targets for the Wii.

"It will be a major shock for Nintendo bulls out there if they are reducing Wii unit guidance because people expect this to go up," said Hiroshi Kamide of KBC Securities to Reuters.

Nintendo reported sales of Wii consoles were 44.96 million worldwide for Dec. 31, 2008 -- a spike of 10 million units compared to October 2008, according to the NPD Group. NPD researchers said more than 5 million were sold in the United States, with 2.04 million in November and 3.04 in December. The DS, which has been on sale since November 2004, had sold 96.22 million units at the end of December.