Tue, May 24, 2011 - Page 10 News List

Sony predicting US$3.2bn net loss on tax write-offs

Reuters, TOKYO

Sony Corp said yesterday it would post a US$3.2 billion net loss for the year that ended on March 31, the latest setback for the Japanese consumer electronics giant.

The maker of the PlayStation video games, Vaio computers and Trinitron TVs has been battling to recover from the March 11 earthquake, and more recently, a series of computing hacking attacks. It is due to announce its full-year earnings on Thursday.

Sony said it now expected a net loss of ¥260 billion (US$3.2 billion) versus a previous forecast for a profit of ¥70 billion, thanks to a “non-cash charge” of around ¥360 billion related to Japanese tax credits.

It stuck with its earlier forecast, issued before the March 11 earthquake, for an annual operating profit of ¥200 billion.

In its first estimate for the year to March next year, Sony said its operating profit would also be about ¥200 billion.

The quake and tsunami damaged Sony plants in northeastern Japan, snarled the supply chain and triggered a plunge in domestic consumption. Sony estimated the impact of the quake in the current year at ¥150 billion at the operating level.

Regarding the hacking attacks that forced it to shutdown its PlayStation Network, Sony said “known costs” were estimated at ¥14 billion. Sony is targeting the end of this month for fully restoring the affected networks.

Many rival firms, including Panasonic Corp, have yet to issue forecasts for the current financial year to next March, due to uncertainty following the disaster.

An analysts’ consensus, according to a SmartEstimates by Thomson Reuters I/B/E/S, is for a 2010-2011 operating profit of ¥197 billion. SmartEstimates place more weight on recent estimates by highly rated analysts.

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