May 16 (Bloomberg) -- Sony Corp., the world's second-largest maker of consumer electronics, said profit will more than double to a record this year on sales of Bravia televisions and narrower losses at the PlayStation game unit.

Net income will rise to 320 billion yen ($2.7 billion) for the year ending March 31, 2008, Tokyo-based Sony said today. Its fiscal fourth-quarter loss widened to the most in four years, after the PlayStation 3 was outsold by Nintendo Co.'s Wii console. The stock rose 1.3 percent in Frankfurt from the Tokyo close.

Reduced game losses would help Chief Executive Officer Howard Stringer meet his promise to raise the company's operating profit to 5 percent of sales this year, on a par with larger rival Matsushita Electric Industrial Co. Earnings at Sony will also get a boost from the movie unit, whose ``Spider-Man 3'' generated record box-office sales when it opened this month.

``It's clear that Sony has got out of its worst period,'' said Mitsushige Akino, who oversees the equivalent of $470 million at Ichiyoshi Investment Management Co. in Tokyo. ``If Sony continues performing better than the market's expectations, the stock may reach 10,000 yen.''

Shares of Sony rose to the equivalent of 6,546 yen as of 11:58 a.m. in Frankfurt from the Tokyo close of 6,460 yen. The earnings were announced after Japan markets closed. Sony climbed 37 percent in the past six months on the Tokyo Stock Exchange, compared with an 8.5 percent gain in the Nikkei 225 Stock Average.

The net income forecast includes a 59 billion yen gain on the sale of land from Sony's former headquarters in Shinagawa, central Tokyo, the company said. Restructuring charges, mainly in the electronics unit, will fall 9.8 percent to 35 billion yen.

Topping Estimates

Sales will rise 5.8 percent to 8.78 trillion yen, while operating profit, or sales minus the cost of goods sold and administrative expenses, will gain sixfold to 440 billion yen.

Sony is assuming an exchange rate of 115 yen to the dollar and 150 yen to the euro for its forecasts. The dollar traded at an average 116.95 yen in the year ended March 31, while the euro was at 150.03 yen, according to data compiled by Bloomberg.

Profit this year was expected to reach 305.6 billion yen, based on the average of 12 analyst estimates compiled by Bloomberg before the earnings announcement.

Sony's profit margin target compares with Matsushita Electric's 5.1 percent margin for the last fiscal year, and 12.7 percent at Apple Inc., the maker of the iPod music players.

For the quarter, the net loss was 67.6 billion yen, compared with 66.5 billion yen a year earlier. Sales rose 13 percent to 2.09 trillion yen, while the operating loss widened to 113.4 billion yen from 51.9 billion yen.

Trailing Wii, Xbox

The games unit's operating loss in the fourth quarter widened to 107.8 billion yen from 61.4 billion yen because of ``severe price competition,'' the company said. Sales rose 85 percent to 281.2 billion yen, boosted by the introduction of the PlayStation 3 in November.

``It would be difficult to achieve profitability at the game business this fiscal year,'' Chief Financial Officer Nobuyuki Oneda said at a Tokyo briefing today. He expects the unit to be profitable in the year ending March 31, 2009.

About 5.5 million PlayStation 3 consoles were shipped by March 31, with 3.6 million of them actually sold, Oneda said.

Production delays for PlayStation 3, caused by parts shortages, have left Sony in third place in worldwide sales of the newest generation of consoles behind Nintendo's Wii and Microsoft Corp.'s Xbox 360. Sony is still the world's biggest console maker because of sales of its older PlayStation 2.

Ken Kutaragi, developer of the PlayStation game consoles, will step down in June after production stumbles forced the company to slash shipment targets.

`Casino Royale'

By comparison, Kyoto-based Nintendo last month reported profit in the company's latest quarter jumped sevenfold. Nintendo expects to ship 14 million Wii units this fiscal year, more than double the number sold in the previous year it was introduced.

The Wii features a motion-sensor controller that allows a user to play virtual games of tennis and bowling, and costs about $250, half the price of the PlayStation 3.

In the electronics division, which includes Bravia TVs and Vaio computers, Sony posted a fourth-quarter operating loss of 74.14 billion yen, narrowing from 81.56 billion yen. Sales rose 25 percent to 1.53 trillion yen.

Profit at the movie unit gained 9 percent to 32.91 billion yen, aided by films including ``Casino Royale'' and ``The Pursuit of Happyness.'' Sales rose 19 percent to 286.4 billion yen.

The financial services business posted a 63 percent decline in operating profit to 29.53 billion yen, and sales dropped 17 percent to 184.2 billion yen.

Oneda said there was no change to Sony's plan to sell shares of the financial unit sometime this fiscal year.

To contact the reporter on this story: Hiroshi Suzuki in Tokyo at Hsuzuki5@bloomberg.net

Last Updated: May 16, 2007 06:31 EDT