At the same time, the Japanese firm pledged to push on with a three-year plan to turn around its fortunes, adding that earnings this full year hinged on its performance in the crucial Christmas period.

Sony Corp.'s pre-tax profit tumbled 69.3 percent to 35.8 billion yen in the three months to June, while revenue fell 6.9 percent to 1.6 trillion yen.

"Sales of our products were very poor in April and May, in line with expectations... but the situation began to change in June, especially in the US and Japanese markets," said chief financial officer Takao Yuhara.

"What is important is our Christmas sales, unless we go through that period we cannot relax," he told a news conference.

Revenue at Sony's key electronics division in April-June slid 9.8 percent to 1.1 trillion yen as orders for televisions and audio goods fell after a surge a year ago ahead of the football World Cup co-hosted by Japan and South Korea.

Sony's game segment, renowned for the PlayStation series, also suffered a bad three months as a rise in PlayStation2 sales in Japan was offset by falling demand in the United States and Europe.

Worldwide shipments of the video game console fell by 1.94 million units to 2.65 million in the quarter.

Sony's music arm remained in the red in the three months to June, though operating losses were less than last year, while revenue slipped 8.8 percent.

"Album sales decreased in many regions worldwide due to the continued contraction of the global music industry brought on by piracy, unauthorised file sharing and CD burning," Sony declared.

Its movies segment became loss-making in the quarter while sales fell due partly to expenses incurred promoting 'Charlie's Angels: Full Throttle'.

Earlier in the year, Sony announced it would spend one trillion yen on a major corporate overhaul through to March 2006 to boost its flagging business by investing more in research and development as well as its electronic-devices division, which includes computers, mobile handsets and camcorders.

In addition the firm will spend 300 billion yen on restructuring -- with 140 billion yen earmarked for this year to March 2004.

"A lot of restructuring charges will be incurred in the second half of the year. Much of it will go towards human resource-related items," said Yuhara, refusing to be drawn on whether the firm would implement an early retirement scheme to reduce its massive workforce.

"We have several options," he told reporters.

Sony faced many uncertainties, said Osamu Hirose, an analyst at the Tokai Tokyo Research Center.

"Its digital cameras are selling well, but prices of these products are falling," he said. "Sony must beef up profitability from its products to really return to a recovery path."

Sony spent 6.5 billion yen on restructuring in April-June.

Despite the weak first quarter results, chairman and chief executive Nobuyuki Idei pointed out in a statement the numbers were far better than in the three months to March when Sony suffered a deep loss.

But ING analyst Richard Chu predicted the stock market reaction to the news, which came after the closing bell, would be "slightly negative" on Friday.

Sony left its full year to March 2004 forecast unchanged, expecting a net profit of 50 billion yen, pre-tax profit of 130 billion yen and revenue of 7.4 trillion yen.

SPACE.WIRE