TOKYO--Sony Corp lifted its annual outlook and returned to profitability in the first quarter on booming demand for its Bravia flat TVs and PlayStation 3 game consoles. Rivals Panasonic Corp and Sharp Corp also reported profits for April-June versus losses a year ago, while Panasonic joined Sony in upgrading its forecast as both firms cashed in on growing sales in emerging markets. Panasonic unveiled plans for a $5.7 billion share offering to help finance a buyout of Sanyo Electric and another unit as it seeks to cut overlap and expand sales of energy and environment related products. The increased profit targets suggest a road to recovery for Japanese electronics makers as consumers and companies revive spending. However, the yen's persistent strength and tough competition with South Korean rivals such as Samsung Electronics and LG Electronics remain key risks. Japan's electronics giants are also keeping a wary eye on the impact of the debt crisis on European demand, which accounted for more than 25 percent of Sony's sales last year. "It (Sony) did well in the April quarter with aggressive marketing, especially in its TV business, but its growth rate will slow down in the current quarter because overall TV sales are weakening in line with a softening global economy," said Park Young-Joo, an analyst at Woori Investment and Securities in Seoul. Sony, the world's second-largest camera maker after Canon Inc, reported April-June operating profit of 67 billion yen ($766 million) versus the consensus for a 13 billion yen loss in a poll of four analysts and a loss of 25.7 billion yen a year ago. The Japanese firms' results were more upbeat than LG Electronics, which announced a worse-than-expected 90 percent fall in quarterly profit on Wednesday, hit by poor TV and mobile handset sales. As well as improving demand for Bravia LCD TVs and Vaio PCs, sales of Sony's PlayStation 3 game consoles, which can now be used to play several 3D games on Sony's 3D TVs, more than doubled to 2.4 million units. Sony has also benefitted from the aggressive cost-cutting implemented in the last financial year by its Welsh-American chief executive, Howard Stringer, a former TV newsman and one of the few foreigners to head a major Japanese company. "Sony's results far exceeded market expectations. The main drivers were stronger demand for electronics products and solid demand from China and emerging markets like Latin America," Anita Huang, manager of ING's Japan Fund, said. She said the fund plans to buy more shares of Sony due to the better-than-expected results. After Sony scraped into profit for the year to March 2010 largely on the back of income from its financial services division, Chief Financial Officer Masaru Kato lauded the latest results as a return to the company's roots. "The real driver of our growth should be the products, services and contents that we offer to customers," he told a news conference on Thursday, singling out new hit products such as a lightweight camera with interchangeable lenses launched last month.