TOKYO: Sony yesterday warned it would report a bigger-than-expected annual loss, blaming costs tied to its exit from the personal computer business, as the once-mighty firm undergoes a painful restructuring.
The Japanese electronics giant said it would book a 130bn yen net loss ($1.27bn) in the latest fiscal year to March, while it slashed its operating earnings outlook.
The figure is worse than a 110bn yen net loss forecast just three months ago, when Sony also announced it would cut 5,000 jobs in its struggling computer and television units.
The move came after Moody downgraded its credit rating on Sony to junk, saying the maker of Bravia televisions and PlayStation game consoles had more work to do in repairing its battered balance sheet. Sony said it now expected to record 30bn yen in additional expenses owing to its move out of personal computers, and 25bn yen in impairment charges tied to its overseas production of Blu-ray discs, DVDs and CDs. Sony reports its financial results later this month.
“Primarily due to demand for physical media contracting faster than anticipated, mainly in the European region, the future profitability of the disc manufacturing business has been revised,” it said. Operating profit in the latest fiscal year would be down 89 percent from the previous year, although sales were expected to jump about 14 percent to 7.77 trillion yen, it said.
PC sales got worse after its February profit warning and “consequently, (the firm) expects to record write-downs for excess components in inventory and accrual of expenses to compensate suppliers for unused components ordered for Sony’s spring PC lineup”, the company said.
“In addition, certain restructuring charges are expected to be recorded ahead of schedule,” it added. AFP