By Grace Huang and Takashi Amano
Sony Corp., the maker of Xperia smartphones and PlayStation consoles, posted a loss 18 percent larger than forecast as the company cut earnings a third time in the past year amid slumping consumer electronics sales.
The net loss was 130 billion yen ($1.3 billion) in the 12 months ended March, Tokyo-based Sony said in preliminary earnings reported today. That compares with a February loss projection of 110 billion yen, which was itself a reduction from an October forecast of 30 billion yen profit.
The wider loss is a setback to Chief Executive Officer Kazuo Hirai’s efforts to revive the fortunes of the Japan technology icon with new game consoles and smartphones. Sony, which is cutting 5,000 more jobs, is struggling to come up with new hits as demand for traditional products like televisions, cameras and personal computers decline.
“There is no stop to their downward revision of earnings,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co. “They can’t get into a growth stage, and it’s difficult to recover. Unless they announce sales of the TV business, the market won’t think Sony is serious.”
Hirai issued the earlier forecast in February as the company announced the sale of its PC unit and a plan to split its TV making unit into a separate unit.
The company has previously agreed to sell its PC business, which produces notebooks under the Vaio brand, to buyout firm Japan Industrial Partners Inc.
The company’s full-year operating income was 26 billion yen, about a third of the 80 billion yen projected in February.
Sony will book about 30 billion yen of extra expenses for the PC unit with sales below budget. The company expects to write down excess components and compensate suppliers for unused materials in its PCs.
The company will also take about 25 billion yen of impairment charges for its overseas disc manufacturing operators as demand slumps.
Sony will announce full earnings and its forecast for the current year on May 14, it said today.
Hirai is trying to revive earnings across divisions, including its entertainment assets after rejecting a partial spinoff proposed by billionaire investor Daniel Loeb last year. (Bloomberg)