Sony Corp reported a ¥27 billion (US$346 million) loss for the latest quarter and downgraded its annual earnings forecast yesterday to stay in the red for the fourth year straight, battered by the strong yen and poor sales of flat-panel TVs.
The Japanese electronics and entertainment conglomerate is now projecting a ¥90 billion loss for the fiscal year through March next year after earlier forecasting a profit of ¥60 billion.
Sony said the strong yen and lower sales, especially in TVs, hurt July-to-September results. It also suffered production disruptions from the widespread flooding in Thailand, which came on top of the supply problems from the March tsunami disaster in northeastern Japan.
Sony also announced a plan to turn around its TV operations, which have lost money for the past seven years straight amid price plunges, an oversupply of panels and intense competition. It said the plan will make the TV business profitable by the fiscal year ending March 2014.
Sony said the major problem was a surplus of liquid crystal displays and it would shrink its TV production from 40 million units a year to 20 million, and aim to reduce display costs. The restructuring would incur a ¥50 billion special charge, it said.
The poor quarterly results and forecast of another annual loss underline a troubled year for Sony.
The company is hoping to integrate smartphones with other consumer electronics, such as televisions and computers, as it seeks to play catchup with Apple Inc. Analysts say the maker of Bravia TVs and Walkman players needs to restore its reputation for innovative gadgets as Apple powers ahead with its iPod, iPad and iPhone.
Sony’s image also suffered a severe blow earlier this year because of a massive online security breach around the world, affecting more than 100 million online accounts.
Quarterly sales fell 9 percent from a year earlier to ¥1.58 trillion, mainly because of an unfavorable exchange rate. The yen has recently hit record highs against the US dollar, which has faltered amid worries about the US economy. A strong yen erodes the value of Sony’s overseas earnings. Sony makes about 70 percent of its sales outside Japan.
Plunging sales of LCD televisions also hurt results, not only from price declines, but also the economic slowdown in the US and Europe, according to Sony.
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