Sony forecasts doubled annual losses

 

Sony has more than doubled its projected annual losses to 520 billion yen (£4.02 billion) - its worst ever - due to a massive tax charge.

With new CEO Kazuo Hirai at the helm, the Japanese electronics company said it expects an additional tax expense of 300 billion yen (£2.32 billion) in the fiscal fourth quarter ending March 30.

It said this non-cash charge stemmed from revaluing US tax credits that are unlikely to be utilised due to its string of annual losses.

In February, the firm had projected an annual net loss of 220 billion yen (£1.70 billion) amid weak TV sales, the strong yen and production disruptions from flooding in Thailand.

The company said its operating loss forecast was unchanged at a loss of 95 billion yen (£735 million). It has forecast a return to profit in the year through March 2013.

Japanese news reports said Sony would cut about 10,000 jobs worldwide over the next year as it tries to return to profit, but the company would not confirm that.

This would be the fourth year of losses for Sony - a daunting challenge for Mr Hirai, who took over as CEO from Welsh-born Howard Stringer this month. Mr Hirai is due to outline the company's new corporate strategy to journalists on Thursday.

Sony, whose businesses sprawl from cameras and cellphones to PlayStation game consoles and movies such as The Smurfs, has for years been struggling to regain the swagger and creative flair that made it a dominant force in the global electronics industry in the 1980s and early 1990s.

PA

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