Electronics giant Sony said it is now headed for its fourth straight annual net loss instead of a profit as Thai floods disrupt camera production on top of losses from a soaring yen and price slides in its TVs and PCs in the United States and Europe.
The maker of Bravia TVs, Vaio computers and PlayStation game consoles slashed its forecast to a net loss of 90 billion yen ($800 million) from a net profit of 60 billion yen. It blamed the deluge in Thailand for cutting 25 billion yen in expected earnings and reduced its TV sales forecast by 9 per cent to 20 million sets.
Sony, which is heading for its eighth straight annual loss in its TV division, is revamping the unit, but a lack of details since the plan was announced three months ago and poor sales are keeping investors downbeat.
"For Sony to come back it needs to focus more on its next generation image technology to convince people that it still has innovation in its DNA," said Yoshihisa Toyosaki, head of Japanese research firm and consultancy Architect Grand Design and a former Sony employee.
Sony, which also cut its full-year operating profit outlook by 90 percent to its lowest level in three years, said earlier this week that it would split its television business into three divisions of outsourcing, LCD TVs and next-generation TVs from November 1st in its latest attempt to turn around the loss-making operation.
Sony is also considering dissolving its flat-screen venture with Samsung Electronics, which will enable it to cut panel supply costs and improve its TV business earnings, according to sources familiar with the matter. It has yet, however, to unveil any plan.
Once a symbol of Japan's high-tech might, Sony is struggling to come up with hit devices and finds itself out-manoeuvred in TVs by Samsung Electronics and in the booming smartphone market by Apple .
Sony is yet another addition to a lengthening list of Japanese firms that have posted poor quarterly results due to factors including the strong yen, floods in Thailand and weak demand in the United States and Europe.
The list includes names such as Honda Motor, Panasonic, Nintendo and Nomura. Sony posted an operating loss of 1.6 billion yen for the July-September period.
"The losses don't tell the whole story," Shiro Kambe, head of corporate communications, told reporters. "We actually kept or raised market share in TVs and other products." Shares of Sony tumbled 3.6 per cent to 1,520 yen ahead of the results today. Sony shares fell 46 per cent between the beginning of the year and Tuesday's close, compared with a 14 per cent fall in the broader market .
Reuters
