Sony, world's second-largest electronics maker, posted Wednesday a 71.8 billion yen (596.6 million dollars) profit, down 226.4 billion yen 68 percent from for the past fiscal year, but also forecast that this fiscal year’s profit would surge more than six times.

The drop was due to losses in its gaming division as Nintendo Co's Wii videogame player has been outselling Sony's PlayStation 3 two-to-one. It was also hit by massive recalls of its laptop computer batteries, which in rare cases can catch fire.

Sony chief financial officer Nobuyuki Oneda told a press conference: “As we set a suggested retail price for the PS3 at a level below the production cost for a strategic reason, the game division suffered a big loss. The huge recall cost for our PC rechargeable batteries also weighed heavily on profitability.”

However, Japanese electronics giant forecast a better than expected turnaround for the current fiscal year, saying it would increase its operating profit to 440 billion yen on a rebound in its core electronics business.

Sales at Sony for the past fiscal year were 8.3 trillion yen, up 10.5 percent from the year before. For the current fiscal year, it forecast another sales hike to 8.8 trillion yen. Net profit was up 2.2 percent last year at 126.3 billion yen and was expected to more than double this year to 320 billion yen, Sony said.

The rosy outlook for this year is thanks to continuing strong demand for flat-screen liquid crystal displays as well as Sony's predictions for rising PlayStation 3 sales.

“Although it seems to be difficult to fully turn around the performance at the game division in the current fiscal year, increased sales of the PS3 should help narrow losses here notably,” Oneda said. “Thanks to strong demand for our LCD TVs, our Bravia TVs captured the number one market share in calendar 2006 and our electronics division is now experiencing a much faster-than-expected improvement,” he added.