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Sony Corp.’s group net profit for the first quarter of this fiscal year nosedived 98 percent to 1.1 billion yen from a year earlier, the company said Thursday.

Sony blamed the disappointing outcome on weak demand for TVs and the absence of a followup movie hit since “Spider-Man.”

But the company is optimistic about the rest of the year, with the U.S. and European economies expected to pick up through the latter half, according to Sony officials.

For the three months through June 30, the firm logged a group operating profit of 16.7 billion yen, plunging 67.9 percent from the previous year. Sales slipped 6.9 percent to 1.6 trillion yen.

The firm said the weak earnings were due to poor sales of Vaio personal computers, audio products and cathode-ray tube televisions.

A relative latecomer to the flat TV market and still heavily dependent on conventional TVs, Sony has been hit hard by consumers’ rapid switch from bulky CRT TVs to plasma display panels and liquid crystal display panels.

Its movie business also fared badly. The division suffered an operating loss during the quarter after failing to roll out another blockbuster movie in the league of last year’s “Spider-Man.”

Sony booked a 5.8 billion yen loss stemming from its mobile handset joint venture, Sony Ericsson Mobile Communications.

Sony’s quarterly earnings announcement was the first in the season among major electronics makers.

The firm’s worse-than-expected results for the final quarter of fiscal 2002, reported April 24, triggered a plunge in Tokyo share prices that came to be known as the “Sony shock.” The company lost more than a quarter of its value during the two sessions following the announcement, helping send the stock market to a 20-year-low.

“There were some encouraging signs in the U.S. and Japan in June,” Sony chief financial officer Takao Yuhara told a news conference. “Sales figures for the electronics division in the month were better than those of last year.”

He said economic indicators in the U.S. and Europe are likely to show better results in the second half of the year, compared to Sony’s initial forecast made a couple of month ago.

But the firm left intact its full-year group earnings forecast through March 31, 2004, at a net profit of 50 billion yen on revenue of 7.4 trillion yen, saying it is too early to revise the projections.

Shares of Sony, which regained lost ground during a recent stock market rally, finished 30 yen lower at 3,760 yen in Thursday’s session, which closed before the firm’s results were announced.