Sony Corp's LCD TV sales will likely fall slightly short of a targeted 60 percent rise in unit terms this financial year, a senior executive said, with new 3D TVs unable to resuscitate soft sales in mature markets.

Sony Executive Deputy President Hiroshi Yoshioka said in an interview with Reuters and other media that Sony would struggle to make the TV division profitable this year and that he was not expecting substantial profits from the operations in the next financial year.

Television sales in Japan, which ballooned this year with a government stimulus plan and the digitization of terrestrial broadcasting, are expected to tumble from December, while an uncertain job market is weighing on U.S. shoppers' appetite for big-ticket items.

After losing money on televisions for the past six years, Sony has been hoping that the introduction of 3D and Internet-capable models would help it to lift LCD TV sales to 25 million units in the year to March 2011 and make the business profitable.

Last week Best Buy Co Inc, the largest U.S. electronics retailer, surprised investors by reporting a drop in quarterly sales at existing stores. It said sales of 3D TVs had fallen behind industry expectations.

Talking to customers, there are some who are worried about how much content has been prepared and others who mistakenly assume that 3D TVs can only show images in 3D, Yoshioka said.

3D LAGS, BUT NOT FAR

But Yoshioka said 3D sales would not fall far behind the company's target of 2.5 million units for the year, while sales of Sony's Google Internet TV, which lets users browse the Web on their TV without a PC, were in line with expectations.

Shares of Sony, which competes with South Korea's Samsung Electronics and LG Electronics in LCD televisions, closed down 1.2 percent at 2,930 yen in Tokyo, while the benchmark Nikkei average fell 0.9 percent.

Sony's share price has fallen nearly 18 percent since the beginning of the financial year in April, compared with the Nikkei's 8 percent drop, partly due to a rise in the yen, which erodes the value of overseas revenues brought back to Japan.

The news about not meeting the sales target is having an impact on the share price, along with a slightly stronger yen to the dollar, said Tomomi Yamashita, fund manager at Shinkin Asset Management.

Yoshioka, who is in charge of Sony's TV, digital camera and electronic device operations, said holiday sales were in line with overall expectations, as emerging markets posted strong growth while developed economies were flat year-on-year.

There have been reports about demand being very slightly above last year in the United States, Yoshioka said. That is also how Sony sees it.

Panasonic President Fumio Ohtsubo said in an interview last week that the company's festive season sales in the United States and Europe would likely be flat or marginally up on the previous year.

Yoshioka said Sony was still in talks with Sharp Corp on whether it would raise its stake in a state-of-the art TV panel plant in Sakai, in western Japan.

Media have reported that Sony would abandon a plan to raise its investment in the joint venture to 34 percent, as it seeks lower-cost panel suppliers in other parts of Asia.

(Additional reporting by Isabel Reynolds; Writing by James Topham; Editing by Nathan Layne and Edmund Klamann)

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