Sony has slashed its annual profit forecast by 62 per cent.
The company has incurred heavy costs for recalls of its laptop PC batteries and has missed market expectations by a wide mark, potentially dampening overall market sentiment.
Besides Sony itself, PC makers - including Dell, Apple Computer and Toshiba - are recalling some eight million Sony batteries that the company has said can on rare occasions overheat and catch fire, shaking consumer confidence in its technological prowess.
The Tokyo-based company said its earnings will also likely come under pressure from a cut in the price of its upcoming game console, PlayStation 3, and slower-than-expected sales of its PlayStation Portable handheld machine.
Sony now expects group operating profit for the year to March to come to 50 billion yen (€335 million), down from its previous forecast in July of 130 billion yen.
That compares with a consensus of a 160.9 billion yen profit in a poll of 20 analysts by Reuters Estimates.
Sony, which will launch the latest version of its games console on November 11th in Japan, said last month it would sell a version of PS3 with a 20-gigabyte hard disk drive for 49,980 yen (€334), down from the previously announced 62,790 yen, to spur demand.
The company also said it would set aside 51 billion yen of reserves for expected costs related to the battery recalls.