Sony reports plunging Q2 profits

Sony blamed the poor performance of its Sony Ericsson venture for a dip in quarterly profits

Sony has blamed its poor quarterly results on a strong yen and softening demand for its cameras and high-end phones in the depressed North American market.

And the consumer electronics giant warned that the situation will not get any better throughout the year.

Sony's net profit plunged to ¥35bn (€207m) in the quarter from April to June from ¥66.5bn (€394m) a year ago.

Consequently, the company trimmed its profit forecast for the year from ¥290bn (€1.72bn) to ¥240bn (€1.42bn).

The main culprit, according to Sony, is the poor performance of the Sony Ericsson joint venture.

The mobile phone maker cut 2,000 jobs earlier this month and announced that profit was down to just €6m from €220m in same quarter last year.

One bright spot in Sony's results is increased sales of games software, despite the company revealing at the end of June that it may never recover the vast sums of cash spent on research and development for its PlayStation 3 console.

Currency exchange rates also remain a problem for Sony. While the US dollar continues to languish, the Japanese yen remains strong, undervalued by 27 per cent against other currencies, according to a report in The Economist.