Shares in Sony, Nintendo and Toshiba Fall After Warnings on Outlook

HONG KONG — Shares in the Japanese electronics giants Toshiba and Nintendo plunged on Friday after the companies warned late on Thursday of disappointing earnings ahead.

The problems facing Japanese companies were highlighted after a government report early Friday showed a record decline in industrial production last month.

Toshiba, Nintendo, Sony and NEC Electronics, some of the biggest names in consumer electronics and technology, all reported disappointing results and gloomy outlooks on Thursday, further proof that the slowdown had expanded well beyond big-ticket items like cars and houses, and revealing the extent of consumer pessimism around the globe.

Toshiba, whose products span chips to household appliances, said it now expected a record net loss of 280 billion yen ($3.13 billion) for the business year ending in March, rather than the 70 billion yen profit it had forecast in September, setting off a decline of 14.8 percent in its share price on Friday.

Toshiba lost 121.1 billion yen in the last three months of 2008 and said it would halve capital spending, to 230 billion yen.

“Demand does not seem to be getting any better from the fourth quarter on,” Naofumi Hara, senior vice president at Sony, told a news conference, according to Reuters.

As the global economic downturn drags on, ordinary consumers everywhere, scared by mounting job losses and the stock market rout last year, have slowed spending to a trickle. Companies, too, have cut back investments on anything from factory machinery and research to photocopiers, computers, information technology upgrades and business travel.

As a result, companies in virtually every sector of the economy, from the software giant SAP to automakers around the world, have had to lay off workers, further depressing consumers’ confidence.

Government data on Friday showed Japanese industrial production fell a record 9.6 percent in December, underscoring the point that Japan’s recession deepened much more rapidly than most observers had expected during the last three months of 2008.

Analysts are skeptical that a recovery will come any time soon.

“Given the current severe market conditions, Toshiba’s expectation of the time it will need to recover its profitability and financial profile may prove overly optimistic,” Kazusada Hirose, a senior analyst at the ratings agency Moody’s wrote on Thursday after downgrading the company.

Adding to the gloom Thursday, the games maker Nintendo cut its outlook, setting off a 12.4 percent plunge in its shares on Friday.

Although Nintendo remains one of the few Japanese consumer electronics giants to still expect a handsome profit for the current business year, its popular Wii game console has turned out not to be as recession-proof as many analysts had thought. Nintendo now expects profits of only 230 billion yen, rather than 345 billion yen, for the current business year.

NEC Electronics, which makes chips, warned of a full-year net loss of 65 billion on Thursday and announced job cuts.

And Sony, the sprawling consumer electronics company behind the Walkman, PlayStation 3 game console and Bravia TV sets, last week issued its second profit warning in three months. The company now expects a net loss of 150 billion yen, rather than a profit of 150 billion yen, for the year through March.

Quarterly results announced by Sony on Thursday revealed that the bulk of the bleeding stems from the electronics division. That includes Sony’s television brands, which are suffering both from collapsing demand and fierce price pressure as competition from other manufacturers heats up.

Sony shares, which fell sharply after last week’s profit warning, slid another 5 percent on Friday.

The announcements, along with the latest economic data, underscore the depth of Japan’s recession in the last three months of last year.

Japanese companies have been racing to cut output and lower costs, and more job cut announcements and profit warnings are expected to become a familiar feature of the current earnings season. NEC Electronics and Toshiba between them announced on Thursday that they were shedding 5,200 temporary staff, adding to the thousands of job cuts already announced by Sony and other Japanese companies.