After 3 red years, Sony predicts a return to profit
By Yuri Kageyama |
May 27, 2011, Friday
|
Print Edition
Print Edition
SONY Corp is forecasting a return to profit for this fiscal year after sinking into the red for the third straight year, hammered by the costs of massive online security breaches and damage from the earthquake and tsunami that hit northeastern Japan in March.
The Tokyo-based company said yesterday that it expects an 80 billion yen (US$975.6 million) profit for the current fiscal year as sales recover in flat-panel TVs, games, personal computers and network services.
Sony chalked up a 259.6 billion yen loss for the fiscal year ended March 2011, the company's biggest net loss in 16 years.
Its loss in 2010 was 40.8 billion yen after a 98.9 billion yen loss in 2009.
Sony said it hopes to boost sales for the fiscal year through March 2012 by 4.4 percent to 7.5 trillion yen.
The losses recall another difficult period in Sony's history, when its bottom line was battered in 1995 by the disastrous results of its movie operations, which followed its US$3.4 billion purchase of Hollywood studio Columbia Pictures in 1989.
Sony, which makes the PlayStation game console and Bravia liquid-crystal display TVs, has been battling production delays and sales losses after supplier factories were damaged by the quake and tsunami.
It lowered its earnings projection earlier this week, citing a charge it must take related to damages from the disaster. It had initially expected to return to profit.
Sony also faced a new kind of challenge to its reputation after acknowledging a massive security breach affecting more than 100 million online accounts, and was forced to close down its online gaming services last month.
Sony is expecting costs related to its online security woes of 14 billion yen, covering customer support, freebie packages, legal costs, lower sales and measures to beef up security.
For the January-March quarter, Sony's losses rose to 388.8 billion yen from a 56.6 billion yen loss for the same period the previous year. Quarterly sales dropped 7.8 percent to 1.58 trillion yen.
Sony has stayed in the red in its core TV business for seven years straight. A strong yen, which erodes the value of overseas sales, and a decline in prices were behind the damage, despite selling more TVs.
Sony stock gained 0.1 percent to 2,238 yen in Tokyo, shortly before earnings figures were announced.
The Tokyo-based company said yesterday that it expects an 80 billion yen (US$975.6 million) profit for the current fiscal year as sales recover in flat-panel TVs, games, personal computers and network services.
Sony chalked up a 259.6 billion yen loss for the fiscal year ended March 2011, the company's biggest net loss in 16 years.
Its loss in 2010 was 40.8 billion yen after a 98.9 billion yen loss in 2009.
Sony said it hopes to boost sales for the fiscal year through March 2012 by 4.4 percent to 7.5 trillion yen.
The losses recall another difficult period in Sony's history, when its bottom line was battered in 1995 by the disastrous results of its movie operations, which followed its US$3.4 billion purchase of Hollywood studio Columbia Pictures in 1989.
Sony, which makes the PlayStation game console and Bravia liquid-crystal display TVs, has been battling production delays and sales losses after supplier factories were damaged by the quake and tsunami.
It lowered its earnings projection earlier this week, citing a charge it must take related to damages from the disaster. It had initially expected to return to profit.
Sony also faced a new kind of challenge to its reputation after acknowledging a massive security breach affecting more than 100 million online accounts, and was forced to close down its online gaming services last month.
Sony is expecting costs related to its online security woes of 14 billion yen, covering customer support, freebie packages, legal costs, lower sales and measures to beef up security.
For the January-March quarter, Sony's losses rose to 388.8 billion yen from a 56.6 billion yen loss for the same period the previous year. Quarterly sales dropped 7.8 percent to 1.58 trillion yen.
Sony has stayed in the red in its core TV business for seven years straight. A strong yen, which erodes the value of overseas sales, and a decline in prices were behind the damage, despite selling more TVs.
Sony stock gained 0.1 percent to 2,238 yen in Tokyo, shortly before earnings figures were announced.
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