Market Report - Sony Stumbles, Matsushita Jumps

ZHANG:
A larger than expected fall in quarterly profit hit Sony shares Wednesday, while those of rival Matsushita jumped on robust growth.

Sluggish mobile phone sales, a lack of hit movies, and severe price competition caused Sony to cut its profit forecast by 17 percent. The company expects weaker prospects for its once proud electronics division.

Sony's struggling mobile joint venture with Sweden's Ericsson faces a demand slump, while it is reportedly eyeing at least $1 billion to buy out Bertelsmann's stake in their entertainment firm.

Despite a victory over Toshiba in the next generation DVD format war, Sony is trying to turn around its TV and game operations, two of its main earnings drags.

Meanwhile, Panasonic-maker Matsushita saw an 86 percent jump in quarterly profit on strong sales of Viera flat panel TVs.

Matsushita says it's on track to sell 11 million flat-screen TVs this year, as profit rises 10 percent overall to over $2.7 billion.

Overall, Asia share markets rallied Wednesday, taking heart from lower oil costs and Wall Street gains.

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