UPDATE 2-Sony shares jump 10 pct after profit forecast

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By Sachi Izumi and Mariko Katsumura

TOKYO, May 15 (Reuters) - Shares of Sony Corp (6758.T: Quote, Profile, Research) soared 9 percent to their highest in two and a half months on Thursday after it forecast an unexpectedly big operating profit this year as it aims to boost flat TV sales and wipe away losses on the PlayStation 3 game console.

Despite suffering an operating losses in the fourth quarter, Sony, locked in a three-way battle with Microsoft Corp (MSFT.O: Quote, Profile, Research) and Nintendo Co Ltd (7974.OS: Quote, Profile, Research) in the game console industry, has been able to narrow losses on PlayStation 3 by cutting manufacturing costs and expanding sales.

With a recovery in the game business, Sony now aims to take its videogame and TV operations into profit this year.

Sony's surprisingly strong outlook followed other bullish results by Matsushita Electric Industrial (6752.T: Quote, Profile, Research) and Nikon Corp (7731.T: Quote, Profile, Research), easing investors' worries over the negative impact from a stronger yen and a decline in consumer spending both at home and overseas.

"With their strong brand name and pricing strategy, Sony successfully rode off negative waves like a stronger yen, price competition and generally weak Christmas sales in North America," said Ichiyoshi Securities' chief strategist Masanobu Takahashi.

"Now the market knows who the winners are, and money is targeting only such winners."

Sony, the maker of VAIO personal computers and BRAVIA television sets, said on Wednesday it expects operating profit to grow 20 percent to 450 billion yen ($4.28 billion) in the year to March 2009, beating a market consensus of 428.5 billion yen. The upbeat outlook comes despite hurdles such as a slowing U.S. economy and a stronger yen.