Sony Recalls 1.6 Million Bravia TV Sets Because of Fire Risk

Sony Corp. recalled 1.6 million Bravia flat-panel TVs sold worldwide since 2007 because a faulty component may cause them to melt or catch fire.

Sony recalled the liquid-crystal display TVs after a September incident in which a customer noticed a small fire and smoke, said Yuki Shima, a Tokyo-based spokeswoman for the world’s No. 3 maker of televisions. Eleven incidents have been reported in Japan since 2008, according to a company statement, and no injuries have been reported.

A faulty component in the backlight systems may be the source of overheating that can melt the top of the TV set, Shima said. It’s the second recall involving Sony products in a month, with KDDI Corp., Japan’s second-largest mobile-phone operator, saying it would replace Sony-made batteries in as many as 2 million handsets because they may overheat and melt.

“Sony-related recalls are following one another and that may ruin the company’s brand image,” said Keita Wakabayashi, an analyst at Mito Securities Co. who rates the stock “neutral plus.” “Considering Sony’s overall business size, the TV recalls won’t shake the company’s grounding.”

The same transformer is used in the five Bravia models in Japan being recalled, according to a Sony statement.

The recalled sets will be repaired if a faulty part was found. Sony will dispatch a service crew to inspect the set and may offer a rental TV while repairs are being made, Shima said. Sony won’t offer refunds or replacement TVs, she said.

U.S., Europe Announcements

There haven’t been any reports of overheating incidents outside Japan, the statement said. The recalls also will be announced today in the U.S. and Europe, Shima said.

The recall was announced after Tokyo markets closed. Sony rose 1.4 percent to close at 1,517 yen. The stock has plummeted 48 percent this year, compared with a 16 percent decline for the broader Topix index.

“It could impact the stock negatively if the recall causes a significant amount of expense,” Wakabayashi said.

The repairs will have a negligible impact on Sony’s earnings, Shima said. The recall was voluntary, she said.

Sony shares declined to their lowest in 24 years earlier this month on speculation the yen’s strength and slumping demand for televisions will hurt earnings. The company, which forecast full-year operating profit of 200 billion yen ($2.6 billion) in July, loses about 6 billion yen of annual operating profit, or sales minus the cost of goods sold and administrative expenses, for every 1 yen decline against the euro.