By Kiyoshi Takenaka
TOKYO (Reuters) - SONY (JP6758.TK)Corp's <6758.T> shares tumbled 14 percent to a 13-year low on Friday after the electronics maker halved its profit forecast, as the credit crisis hurts demand for its cameras and flat TVs and drives up the yen.
The revision stirred worries over other Japanese high-tech exporters' earnings, and some investors say the maker of Bravia LCD TVs may have to cut its outlook again as its assumptions for the euro/yen look optimistic compared with current levels.
"We see a risk of further shortfalls and think the negative news is not exhausted," Goldman Sachs analyst Yuji Fujimori said in a note to clients, adding that he was chopping his target price on the company by 1,000 yen down to 1,900 yen.
Sony's latest outlook cut -- its second for the year -- came as investors braced for a slew of quarterly earnings reports from peer technology companies next week.
"The Sony warning showed that predictions for company earnings have been too optimistic, and now with the stronger yen the whole situation is becoming much worse," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
The Japanese electronics and entertainment conglomerate slashed its operating profit by 57 percent to 200 billion yen ($2 billion) on slowing demand for its TVs and Cyber-shot digital cameras, adding that the recent surge in the yen against the euro and the dollar has sliced into its profits.
Sony may close some plants, reduce capital spending and cut jobs to cope with a business environment it warned could remain weak through most of next year. It aims to compile fresh restructuring steps as early as the end of the year.
Sony shares ended down 14.1 percent at 1,972 yen, helping the benchmark Nikkei average <.N225> fall 9.6 percent to its lowest close since April 2003.
Canon Inc <7751.T> and Panasonic Corp <6752.T>, which report quarterly results on Monday and Tuesday, respectively, were also hit after Sony cut its compact digital camera sales outlook for the year to March by 8 percent and LCD TV sales target by 6 percent.
Canon, the world's largest digital camera maker, fell 12.6 percent to 2,665 yen, while Panasonic, which competes with Sony and Samsung Electronics Co Ltd <005930.KS> in flat TVs, lost 12 percent to 1,346 yen.
Sony's latest outlook is based on a euro/yen exchange rate assumption of 140 yen for the second half of the year to March and on the premise that Tokyo stock levels remain unchanged from September 30 for the last six months of the business year.
Both of those assumptions are far more favourable for Sony earnings than the current market levels.
The euro traded around 118 yen on Friday, while the Nikkei has lost 32 percent so far this month.
(Reporting by Kiyoshi Takenaka; Editing by Hugh Lawson)
