Sony set for 4th straight year of losses
Source: Agencies |
November 3, 2011, Thursday
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Print Edition
Print Edition
SONY reported a 27 billion yen (US$346 million) loss for the latest quarter and downgraded its annual earnings forecast yesterday to stay in the red for the fourth straight year, battered by the strong yen and poor sales of flat panel TVs.
The Japanese electronics and entertainment conglomerate is now projecting a 90 billion yen loss for the fiscal year through March 2012 after earlier forecasting a profit of 60 billion yen.
Sony Corp said the strong yen and lower sales, especially in TVs, hurt July-September results. It also suffered production disruptions from the widespread flooding in Thailand, which came on top of the supply problems from the March tsunami disaster in northeastern Japan.
Sony also unveiled a plan to turn around its TV operations, which have lost money for the past seven years straight amid price plunges, an oversupply of panels and intense competition. It said the plan will make the TV business profitable by the fiscal year ending in March 2014.
Sony said the major problem was a surplus of liquid crystal displays, and it would shrink its TV production from 40 million units a year to 20 million. It also aims to reduce display costs and the number of models. The restructuring would incur a 50 billion yen special charge, it said.
"Management is feeling a serious sense of crisis about the seven years of losses," said Executive Deputy President Kaz Hirai. "I promise to lead the turnaround plan to get us out of the red."
The poor quarterly results and forecast of another annual loss underline a troubled year for Sony.
The company is hoping to integrate smartphones with other consumer electronics, such as televisions and computers, as it seeks to play catchup with Apple Inc. Analysts say the maker of Bravia TVs and Walkman players needs to restore its reputation for innovative gadgets as Apple powers ahead with its iPod, iPad and iPhone.
Hirai, a candidate to succeed current CEO Howard Stringer to head Sony, said that in addition to fixing the money-losing TV business, a growth strategy depended on boosting the company's smartphone business, especially in the United States.
He said Sony will work at attractive network services so that entertainment can be enjoyed on various gadgets, such as mobile phones, game machines and bigger displays.
Quarterly sales fell 9 percent from a year earlier to 1.58 trillion yen, mainly because of an unfavorable exchange rate. Tokyo-based Sony had a loss of 260 billion yen in its previous fiscal year.
The Japanese electronics and entertainment conglomerate is now projecting a 90 billion yen loss for the fiscal year through March 2012 after earlier forecasting a profit of 60 billion yen.
Sony Corp said the strong yen and lower sales, especially in TVs, hurt July-September results. It also suffered production disruptions from the widespread flooding in Thailand, which came on top of the supply problems from the March tsunami disaster in northeastern Japan.
Sony also unveiled a plan to turn around its TV operations, which have lost money for the past seven years straight amid price plunges, an oversupply of panels and intense competition. It said the plan will make the TV business profitable by the fiscal year ending in March 2014.
Sony said the major problem was a surplus of liquid crystal displays, and it would shrink its TV production from 40 million units a year to 20 million. It also aims to reduce display costs and the number of models. The restructuring would incur a 50 billion yen special charge, it said.
"Management is feeling a serious sense of crisis about the seven years of losses," said Executive Deputy President Kaz Hirai. "I promise to lead the turnaround plan to get us out of the red."
The poor quarterly results and forecast of another annual loss underline a troubled year for Sony.
The company is hoping to integrate smartphones with other consumer electronics, such as televisions and computers, as it seeks to play catchup with Apple Inc. Analysts say the maker of Bravia TVs and Walkman players needs to restore its reputation for innovative gadgets as Apple powers ahead with its iPod, iPad and iPhone.
Hirai, a candidate to succeed current CEO Howard Stringer to head Sony, said that in addition to fixing the money-losing TV business, a growth strategy depended on boosting the company's smartphone business, especially in the United States.
He said Sony will work at attractive network services so that entertainment can be enjoyed on various gadgets, such as mobile phones, game machines and bigger displays.
Quarterly sales fell 9 percent from a year earlier to 1.58 trillion yen, mainly because of an unfavorable exchange rate. Tokyo-based Sony had a loss of 260 billion yen in its previous fiscal year.
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