As was expected, Sony today announced weak results for the latest fiscal quarter ended September 30. Thanks to the company's worldwide laptop battery recall and heavy investments in the PlayStation 3, Sony's group net profit for the period was just 1.7 billion yen ($14.3 million) compared to 28.5 million yen for the same quarter one year ago.

The laptop battery situation apparently contributed significantly to Sony's sharp decline for the period. The company incurred a cost of 51 billion yen thanks to a recall of 9.6 million batteries for major laptop makers such as Dell, Apple, and Lenovo. The company did see an eight percent gain in sales, rising from 1.7 trillion yen to 1.85 trillion yen, although the battery recall largely offset this.

Sony's game division suffered a 43.5 billion yen operating loss thanks to costs associated with the upcoming launch of the PlayStation 3. During the same period in 2005, Sony had posted a profit of 8.2 million yen. Sales and operating revenue were down more than 20 percent for the quarter to 170.3 billion yen. Sony said that research and development, as well as marketing and manufacturing costs related to the PS3 seriously eroded the game division's profitability.

Hardware and software sales were down for the game unit, but Sony said that profit from its PS2 and PSP businesses remained relatively stable. The company said that 5.02 million PS2s and 3.89 million PSPs were shipped during the quarter. PS2 software shipments were at 47 million units, a decrease of 3 million. PSP software was actually up 3.9 million units, totaling 12.9 million for the period.

As was mentioned in the forecast story linked above, the combination of the battery recall and the huge PS3 costs have forced Sony to reduce its full-year profit forecast by 38 percent to 80 billion yen.

Sony is counting on the PS3 to help turn the company around, but it could be rough in the early going. "Although Sony has cut the PS3 price [in Japan], it is still quite steep," Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management, mentioned to Reuters. "I don't now how many units Nintendo will sell, but it looks to me like the Wii will be outselling the PS3 at the initial stage."