Sony lowers its full-year earnings forecast as it battles a strong yen and declining sales of TVs and game consoles
Sony's red ink worsened in the April-June quarter and it lowered its full-year earnings forecast as it battles a strong yen and declining sales of LCD TVs and video game consoles.
The Japanese electronics and entertainment company on Thursday reported a quarterly loss of ¥24.6bn (£202m) compared with a ¥15.5bn loss a year earlier.
Sales edged up 1.4% to ¥1.52tn, helped by cameras, professional broadcasting products and mobile phones.
Tokyo-based Sony lowered its earnings forecast for the business year through March 2013 to a ¥20bn profit, down from ¥30bn projected in May, citing uncertainty in foreign exchange rates and global demand.
The company said it was hurt in the April-June quarter by a strong yen, which eroded overseas earnings, and by declining sales of liquid-crystal display TVs and PlayStation 3 and PS Vita video game consoles.
It also got hit by a ¥20bn income tax expense, had ¥11.3bn in restructuring charges for the quarter, and invested heavily in image sensor production.
Sony posted a ¥456.6bn loss in its previous business year. That was the fourth straight year of losses and the biggest loss in the company's 66-year history.
Once the stellar brand symbolising Japan's technological prowess, Sony has lost its shine. It is getting beaten in TVs by South Korea's Samsung Electronics and by Apple in devices such as the iPhone and iPod.
Sony's troubles were exacerbated in 2011 by factory and supplier damage in northeastern Japan from the March earthquake and tsunami.
Key to Sony's turnaround is stopping the red ink in its TV business, which has lost money for eight straight years. The losses are expected to continue for the current business year.
And it has yet to carve out new areas for profits it has long promised, such as smartphones and tablet computers.
Sony is aiming for a comeback under Kazuo Hirai, appointed president in April, who has headed the company's game division and built his career in the US
Sony said that for the latest quarter, TV sales had fallen but operating losses in the division had been trimmed to less than half of what they were the year before.
Earlier this year, Hirai said the company would cut 10,000 jobs, or about 6% of its global workforce, and turn a profit in TVs by the fiscal year ending March 2014.
The job cuts, announced by Hirai, come on top of a couple of rounds under his predecessor, Welsh-born Sir Howard Stringer, who remains chairman and was the first foreigner to head Sony.
In its movies division, Sony achieved a 6% increase in sales with the hit Men in Black 3, and better cable and network program revenue.
But it had an operating loss partly because of marketing expenses for other 2012 films, including The Amazing Spider-Man.
In music, Sony suffered both lower sales and profit partly because the overall music market shrank, according to the company. Best-sellers included Carrie Underwood's Blown Away and Usher's Looking 4 Myself.
Sony said an investor group it was part of completed the acquisition of the leading music catalogue EMI Music Publishing in June by forming a joint venture that acquired the catalog for $2.2bn.
Sony, in conjunction with the estate of Michael Jackson, paid $320m to acquire a 40 percent stake in that joint venture.
Sony has also been struggling in games as sales dropped for its PSP handheld and PS3 home console, as well as game software for those systems.
Such sales losses were only partially offset by the PS Vita portable, which went on sale in the UK in February.
Sony shares, which have lost more than half their value over the past year, gained 2.4% to ¥964 in Tokyo. Trading had ended before earnings were announced.
Source: http://www.guardian.co.uk/technology/2012/aug/02/sony-loss-grows-cuts-earnings-forecast
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