Costs push Sony to lose US$1.3b quarterly
Print Edition
SONY Corp sank to a 138 billion yen (US$1.3 billion) quarterly loss, hit by costs from selling its personal computer business, and is forecasting more red ink as it struggles to execute a long-promised turnaround.
The Tokyo-based maker of the PlayStation 4 game machine, Bravia TVs and Walkman digital player also reported yesterday a loss of 128.4 billion yen for the fiscal year through March, about three times its loss of 41.5 billion yen the previous year.
It forecast a 50 billion yen loss for the year ending in March 2015 as overall sales are expected to be flat without its Vaio PC business.
Earlier this month, Sony said it would report a bigger annual loss than forecast because of expenses that stemmed from selling Vaio, such as restructuring charges and dealing with excess inventory in components.
The PC-related losses are expected to continue this fiscal year, totaling 80 billion yen, on top of the 92 billion yen for the fiscal ended in March 2014.
Sony also suffered a drop in the value of its overseas disc making business and its battery business.
Chief Executive Kazuo Hirai and some 40 other senior executives are returning their entire bonuses, reducing their annual pay by 40-50 percent. Sony executives have taken some pay cuts in recent years to take responsibility for the company’s poor performance.
Sony has lost much of the brand cachet that stemmed from once being at the cutting edge of consumer electronics. In recent years it has fallen behind in digital recorders and flat-panel TVs while also facing competition from a host of new players that can make appliances at lower costs.
In gadgetry, it is American rival Apple Inc and Samsung Electronics Co of South Korea that have dazzled with their innovations, not Sony.
In February, Sony said it would exit the PC business, despite the popularity of the Vaio brand among some Sony fans, especially in Japan. The deal to sell Vaio to a Japanese conglomerate was signed earlier this month and the transaction is set to be completed in July.
Sony’s red ink is flowing despite an improvement in sales, which rose 14 percent to 7.7 trillion yen for the fiscal year.
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