The worst may be over for Sony ( SNE), which raised its full-year earnings forecast Tuesday. Brisk sales of digital cameras and flat-panel TVs signaled a recovery in its electronics division, and a box-office strong run for movies such as Casino Royale boosted the company's fortunes in the third quarter. For the quarter ended Dec. 31, Sony's overall sales increased nearly 10% to 2.61 trillion yen ($21.9 billion) from the same time in 2005. However, increased costs from the launch of the PlayStation 3 console and continued loss per unit dragged profitability down 5.3% to 159.9 billion yen, from 168.90 billion yen a year earlier. Operating income decreased 14.9% to 178.9 billion yen from the same period last year. "Sony has done much better than expected," says Martin Kariithi, ananalyst at independent research firm Technology Business Research. "Electronics had higher-than-expected earnings, and movie revenues came in strong, though games was weak. But it can only get better for Sony from here." Electronics and games make up roughly 90% of Sony's revenue, Kariithi estimates. Shares of Sony were down 7 cents or 1.2% to $46.43 at midday. The Japanese giant's games division posted a loss of 52.3 billion yen in the third quarter. The division had posted a profit of 67.8 billion yen during the same period the previous year.