Sony reports $1 bln annual loss, first in 14 years
For Sony Corp., the worst isn’t over yet.
After posting its first annual loss in 14 years, the Japanese media and electronics giant said Thursday that it expected to sink deeper into the red this year.
The maker of Bravia televisions and PlayStation 3 game consoles said it lost $1 billion, or $1.01 a share, for its fiscal year ended March 31. That contrasted with the previous year, when it earned $3.7 billion, or $3.51 a share. Revenue fell 13% to $78.9 billion.
Because of continuing economic pressures and higher restructuring costs, Sony projected that it would lose 120 billion yen ($1.25 billion) for its current fiscal year, wider than 98.9 billion yen last year. The company’s annual revenue is expected to continue sliding, down 6% to 7.3 trillion yen.
In January, Chief Executive Howard Stringer told investors to prepare for big losses, citing a downturn in the Japanese stock market that ate into Sony’s financial services business, an appreciating yen that made its exports pricier and a global economic slump that caused consumers to tighten their purse strings.
For its fourth quarter, Sony lost $1.7 billion, or $1.68 a share, compared with a profit of $290 million, or 28 cents, for the year-earlier quarter. Sales for the three-month period fell to $15.6 billion from $19.5 billion.
Sony has taken a number of steps to pare expenses, eliminating 8,000 jobs, or 4% of its global workforce, and closing three factories by the end of December.
For the quarter, Sony’s electronics business, which accounted for 61% of the company’s sales, also was responsible for 93% of its quarterly loss. Although sales of its Bravia LCD TVs grew, sales of its Handycam video cameras, Vaio computers and Cyber-shot cameras plunged, leading to a 36% drop in revenue.
Sony’s PlayStation games business also took a hit. Sales of PlayStation consoles and games fell 39% in the quarter. Sony, however, projected a 30% increase in the number of PS3s sold this fiscal year, leading some analysts to speculate that the company would cut the price of the $399 device sometime this summer.
But Patrick Seybold, a U.S. spokesman for the Tokyo company, was unequivocal: “We have no plans for a price drop.”
Although movie and TV studio Sony Pictures saw a 12% drop in revenue in the quarter, it posted a profit of $145 million, down 61% from a year earlier because of the slimmer slate of releases. The company said the division is expected to see higher sales and profit thanks to a larger release lineup.
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