TOKYO — Japan's Nippon Steel and Sumitomo Metal Industries plan to combine their businesses next year, creating the world's second-biggest steel maker.

Nippon Steel, Japan's No. 1 steelmaker, and its smaller rival said Thursday they aim to be operating as a single company by October 2012.

Both want to expand global operations, especially in China, India and other emerging countries where demand is expected to grow while consolidating operations in the shrinking Japanese market.

The combined company would be No. 2 after Luxembourg-based ArcelorMittal SA and have annual steel production of 47.8 million metric tons.

Japanese steel makers have been struggling to stay competitive.

“We plan to establish a stronger structure so that we can compete globally, as we expect the world's steel industry will keep growing,” said Sumitomo President Hiroshi Tomono.

TOKYO — Sony’s quarterly profit dropped 8.6 percent as a strong yen and falling TV prices erased the boost the Japanese electronics and entertainment company got from its hit movie “The Social Network.”Tokyo-based Sony said today it earned 72.33 billion yen in profit for the October-December quarter, down from 79.17 billion yen the year before.The profit was higher than forecast in a survey of analysts by financial data provider FactSet.Sony lost about 13 billion yen in its key TV division, making it almost certain it will remain in the red in TVs for the seventh straight year.“We have been trying to turn around the TV business each year, and we can only say we will continue such efforts,” said Chief Financial Officer Masaru Kato. TV prices have been declining while prices for panels, a crucial TV component, were high, he said.