TOKYO — Sony is sinking into its first yearly operating loss in 14 years as sales for digital cameras, flat-panel TVs and other gadgets took a hammering from the global recession and a soaring yen, analysts said yesterday.

Sony's U.S. shares closed down nearly 4 percent yesterday, falling 86 cents to $22.24.

Japan's top business daily, The Nikkei, reported yesterday that Sony was expected to rack up a $1.1 billion operating loss for the fiscal year ending in March.

The newspaper said operating losses — which reflect the company's core business operations — could balloon to as much as twice that.

Behind Sony's dismal forecast are faltering sales in electronics, especially in the key U.S. and European markets.

Tokyo-based Sony Corp. would not comment. Earnings for the fiscal third quarter, which ended in December, are expected on Jan. 29.

Sony's downturn highlights the pain even Japan's premier brands are suffering amid the global slowdown. Barely a month ago, Toyota Motor Corp., the nation's top automaker, said it was expecting its first annual operating loss in 70 years.

The U.S. financial meltdown has crushed spending on flat-panel TVs and other gadgets — Sony's mainstays. The credit crunch and consumer worries hit right ahead of the critical year-end holiday shopping season.

The strong yen hasn't helped. While the dollar bought about 113 yen a year ago, it now gets about 90, meaning Sony's exports are more expensive. Sony is particularly vulnerable to the strong yen because about 80 percent of its sales are overseas.

The last time — and only time — Sony racked up an operating loss, for fiscal 1995, the red ink came from one-time losses in its movie division, marred by box office flops and lax cost controls.

At that time, its core electronics unit was still booming.

Sony, once considered an innovator with its Walkman portable player and PlayStation video game machine, has seen its brand power gradually diminish in the face of rivals such as Apple Inc., maker of the popular iPod digital player.