Japanese consumer electronics giant Sony Corp. said that it is likely to report a giant 260 billion yen ($3.2 billion) loss for fiscal year ended March 31, after previously estimating a gain.
Sony said that the loss is mainly due to a 360 billion yen ($4.4 billion) write off of a tax credit from an earlier period. The electronics company, which makes Bravia televisions, Vaio computers, and PlayStation video game consoles, originally said that it would earn $860 million in profits for the year. The company revised its profitability guidance ahead of its earnings announcement later this week, according to Tokyo Stock Exchange rules.
The earthquake in early March did not help Sony’s earnings. Nine assembly plants in northeastern Japan were affected by the quake and the ensuing tsunami, affecting production and distribution. In addition, the earthquake greatly decreased domestic consumption of electronic goods in Japan.
Besides the quake and the write down, Sony’s earnings were in the black—200 billion yen in operating income for the year.
But Sony estimates that current year sales will rebound. The company said that it expects sales for fiscal year 2012 to be around 7.2 trillion yen, and it would make a profit.
“Despite the impact of the Great East Japan Earthquake, sales are expected to increase year-on-year, operating income is expected to be flat year-on-year, and net income attributable to Sony Corporation’s stockholders is expected to be positive,” Sony said in a presentation to investors released this week.
But Sony faces increasing competition in a number of segments—it is no longer the biggest player in the global television market, and it has long been an afterthought in the digital music space since the advent of the Apple iPod. One of its more profitable and most dominant businesses, the video game segment, is also reeling following a recent hacker attack on the PlayStation Network (PSN).
Sony temporarily shut down its PSN network after a massive attack last month which could have compromised more than 70 million user accounts. It restored PSN this month in the United States and Europe.
The company said that the hacker attack cost the firm more than 14 billion yen ($170 million) in investigations and liability insurance costs.
Sony said that the loss is mainly due to a 360 billion yen ($4.4 billion) write off of a tax credit from an earlier period. The electronics company, which makes Bravia televisions, Vaio computers, and PlayStation video game consoles, originally said that it would earn $860 million in profits for the year. The company revised its profitability guidance ahead of its earnings announcement later this week, according to Tokyo Stock Exchange rules.
The earthquake in early March did not help Sony’s earnings. Nine assembly plants in northeastern Japan were affected by the quake and the ensuing tsunami, affecting production and distribution. In addition, the earthquake greatly decreased domestic consumption of electronic goods in Japan.
Besides the quake and the write down, Sony’s earnings were in the black—200 billion yen in operating income for the year.
But Sony estimates that current year sales will rebound. The company said that it expects sales for fiscal year 2012 to be around 7.2 trillion yen, and it would make a profit.
“Despite the impact of the Great East Japan Earthquake, sales are expected to increase year-on-year, operating income is expected to be flat year-on-year, and net income attributable to Sony Corporation’s stockholders is expected to be positive,” Sony said in a presentation to investors released this week.
But Sony faces increasing competition in a number of segments—it is no longer the biggest player in the global television market, and it has long been an afterthought in the digital music space since the advent of the Apple iPod. One of its more profitable and most dominant businesses, the video game segment, is also reeling following a recent hacker attack on the PlayStation Network (PSN).
Sony temporarily shut down its PSN network after a massive attack last month which could have compromised more than 70 million user accounts. It restored PSN this month in the United States and Europe.
The company said that the hacker attack cost the firm more than 14 billion yen ($170 million) in investigations and liability insurance costs.
