Sony's share price has dropped 8% on the Tokyo Stock Exchange in response to media speculation that the company will make a Y100bn operating loss in the year ending March 2009.
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The Japanese electronics maker has declined to confirm or deny the reports ahead of the release of its third-quarter financial results on January 29, according to the Financial Times.
In addition to the global economic downturn, Japanese electronics makers are coming under the added pressure of a stronger Yen making exports more expensive compared with Korea and Taiwan.
In October 2008 Sony forecast an operating profit of Y200bn, but since then yen has strengthened from 100 to 89 to the dollar, which analysts said could cost the company up to Y150bn.
Further losses are expected to come from Sony's restructuring and factory closure plans announced in December, as well as write offs of inventory that cannot be sold.