SONY, the electronics and media giant, has forecast a modest recovery in profits this year after a dismal previous 12 months, which saw earnings decline across almost every one of the group’s operations.

The company pinned its hopes on digital cameras, flat panel televisions, DVD recorders and the upcoming release of Spider-Man 2, to boost its profits this year by 13 per cent to 100 billion yen (£510 million).

Yuhara Takao, chief financial officer, said: “The boom in digital home appliances in Japan should spread to the global market for the current fiscal year.”

This year’s cautious optimism represents a sharp contrast from last year’s results announcement. That saw Sony deliver a severe profits warning amid unexpected weakness in its core consumer electronics business.

However, Sony’s anticipated recovery still left Tokyo-based analysts unimpressed. They were expecting the company to make about Y108 billion in 2005, compared with the Y100 billion the firm predicted.

The anticipated improvement also leaves Sony short of where it was two years ago, when net profits were Y115.5 billion. In the year to March 2004, profits fell 23.4 per cent to Y88.5 billion.

The earnings were depressed by the company’s ongoing three-year restructuring programme. Sony is axing 20,000 jobs, which cost it Y168.1 billion last year and will cost Y130 billion more in the year ahead.

Across the divisions there was little good news. Consumer electronics saw a loss of Y35.3 billion, compared with a profit the year before, as the impact of a previously announced redundancy programme hit earnings.

Profits from traditional cathode-ray televisions tumbled, as consumers switched interest to flat screens. The company’s Clié handheld personal organisers also performed poorly, although the group’s Vaio desktops helped to blunt the problem.

Earnings in the PlayStation division fell 40 per cent to Y67.6 million, as the group invested heavily in a future PlayStation. Demand for the PlayStation2 eased by 2.4 million units to 20.1 million.

Profits from Hollywood also fell 40 per cent, to Y35.2 billion, as the group counted the cost of flops such as Charlie’s Angels: Full Throttle.

The prior year was boosted by the success of Spider-Man, which the company hopes to reproduce this financial year with a sequel.

Only the music division, which is under the stewardship of cost-cutter Andrew Lack, showed signs of recovery. The unit returned to the black to the tune of Y19 billion, and the group held sales in what is generally considered to be a declining market. The success of albums such as Beyoncé’s Dangerously in Love helped the division.

The company issued the figures after the Tokyo market closed. In the United States the shares eased 2 per cent to close at $41.94.

In a separate development, Sony Ericsson, the group’s multimedia mobile phone joint venture, appointed Miles Flint, a Briton, as its next president.

Mr Flint is currently head of marketing for Sony Europe. The president is the chief executive of the business, which is the world’s fifth largest mobile phone maker.