Sony reports $1bn annual loss

Sony Corp. said it lost 98.9 billion yen ($1 billion) in the fiscal year through March, its first annual net loss in 14 years, and projected it would lose even more money this year amid a slump in consumer demand for electronics goods.



Sony, which makes Bravia flat-panel TVs and Cyber-shot digital cameras, also said today it is closing three plants in Japan this year to help turn its business around. That brings the total number of factories it is closing globally to eight by the end of March 2010. It is also in the midst of cutting 16,000 workers from its payrolls.

Hit by dropping sales and the strong yen, Sony lost 165 billion yen in the January-March quarter, compared to a 29 billion yen profit for the same period the previous year.

Sony joins a string of other big Japanese corporate names, including Toyota Motor Corp. and Hitachi Ltd., that have announced huge losses — and bleak outlooks.

Analysts say Sony's Chief Executive Howard Stringer, who decided to center power in his position earlier this year by also becoming president, has yet to give details of a turnaround plan, including strategies and products.

Stringer, a Welsh-born American and the first foreigner to head Sony, has promoted four relatively young Japanese executives onto his managerial team. Representing the company's gaming and electronics sectors, they aim to take advantage of Sony's sprawling empire to differentiate it from a host of rivals such as South Korea's Samsung Electronics Co. and Taiwan's Acer Inc., which are better at producing cheaper products.

The fiscal year loss, while big, was better than Sony's forecast for a 150 billion yen shortfall. Sony said the result wasn't as bad partly because TV prices held up better than expected. A one-time gain from a change in Japanese tax laws also helped, it said.

But the electronics and entertainment company said no quick recovery was in sight, projecting a 120 billion yen ($1.2 billion) loss for the fiscal year through March 2010.

Sony continued to lose money in its game segment, where its PlayStation 3 home console and PlayStation Portable have struggled against rival offerings from Nintendo Co., the Wii and DS, as well as in some markets against the Xbox 360 from Microsoft Corp.

Koya Tabata, analyst with Credit Suisse in Tokyo, said the forecast was in line with what he had expected. Sony must in the short run fix its electronics inventory as one step in turning its business around, he said.

"In the longer term, we are all waiting for the PlayStation network business to deliver profits. But that depends on management."

Sony sold 10.06 million PlayStation 3 machines for the fiscal year through March, up 10 per cent from the previous year. It also sold more PlayStation Portable machines, at 14.11 million during the fiscal year, up slightly from 13.81 million.

The results for the fiscal year through March were a reversal from the 369.4 billion yen profit Sony recorded a year earlier. Annual sales slid 12.9 per cent to 7.73 trillion yen, it said.

Sales for the fiscal year fell in all key markets: down 20 per cent in the U.S., 17 per cent in Europe and 14 per cent in Japan.

Sony is closing three plants in Japan by the end of December — one for cell-phone cameras, another for video recorder parts and another for systems used for smart cards. After they are shuttered, the number of plants around the world will dwindle from 57 last year to 49.

The company said it was on track with its previously announced plan to reduce 8,000 of its 185,000 jobs around the world, and trim another 8,000 temporary workers who aren't included in the global work force tally.

Sony said it had an operating loss in its core electronics segment because of the slowing global economy, price competition and a strong yen, which erased any benefits from better liquid-crystal display TVs.

In its movies division, home entertainment sales declined. They were not offset by some of its stronger motion picture releases, including "Hancock."

Sony stock dropped 6.8 per cent to 2,400 yen in Tokyo. Earnings were announced after trading ended.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Loan Underwriter

£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935
The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory