Sony soars as PS2 blasts opposition

HUGE demand for its PlayStation 2 games console in the key Christmas shopping season helped Japanese electronics giant Sony beat pessimistic forecasts for third-quarter earnings.

Operating profit in the quarter rose almost 10% to 158.6bn yen (£850m), on sales up 8% to 2.29 trillion yen, although net profit fell 14% to 64bn yen (£339m), against a consensus forecast of 40bn yen.

The expected slump in consumer demand following the 11 September terror attacks on the US failed to materialise, as the falling yen lowered prices of Sony's consumer electronics, helping boost sales.

The figures appear to confirm that Sony's PlayStation 2 has surged ahead of Microsoft's X-Box and Nintendo's GameCube in the three-way battle for supremacy. The results also supported the forecasts of Sony directors that 11 September would lead to American consumers spending more time at home.

Its games operation delivered a massive turnaround after heavy development costs had sent losses soaring. Operating profits for the division during the quarter to end-December were 66.4bn yen, compared with a loss of 13.9bn in the same period a year ago.

With the yen continuing to weaken, Sony officials today raised their forecast for full year operating profit from 120bn yen to 130bn. Ahead of the results, Sony's Tokyo-listed shares rose 2% to close at 6200 yen, then added 200 yen more on the Instinet electronic stock exchange.