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Friday, June 06, 2008

Earth quake forced to change Sony and Sharp's sales projection in China

The May 12th earthquake has been a major shock for the people of China and this is also hurting the business of the country. Sony Corporation (TYO: 6758) and Sharp Corporation (TYO:6753), two of the largest Japanese electronics companies are expecting lower sales for unknown period of time. Normally, summer is a big sales season but the death and destruction has spoiled people’s mood for shopping. Every day, they are seeing death and destruction on the television. Sony’s camera sales has dropped 20% and it has changed its Bravia TV sales projection. Sharp Corporation, Japan’s largest LCD monitor producer is also expecting lower sales due to earth quake shock. Bloomberg.com reports:

China's electronics sales may have fallen 10 percent in May from April because of the quake's impact on consumer spending, said Kevin Wang, a Shanghai-based analyst at researcher iSuppli Corp. Retail sales in the world's fastest-growing major economy probably slowed last month after surging the most since 1999 in April, based on economists' estimates compiled by Bloomberg.

Sony rose 1.1 percent to 5,480 yen at the end of trading on the Tokyo Stock Exchange, while Sharp fell 1.9 percent to 1,778 yen. The benchmark Nikkei 225 Stock Average climbed 1 percent.

Sony has delayed its promotional offers to liquid-crystal display. Best Buy Co.Inc. (NYSE:BBY) the largest US electronic store chain also postponed plans to bring Japanese all-girl band Morning Musume to China. Despite the emotional shock of the people, Sony is expecting to sustain a higher than 30% sales growth.

Related article:
Bloomberg.com

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