Sony in red for 1st time in 14 years
TOKYO: Sony Corp. announced Thursday its first annual loss in 14 years and warned it would stay in the red this year as the global economic downturn inflicts heavy damage on Japan's high-tech giants.
The group posted a net loss of 98.94 billion yen (1.0 billion dollars) for the year to March, a dramatic turnaround from the previous year's profit of 369.44 billion yen.
The maker of Bravia televisions, PlayStation game consoles and Walkman music players logged an operating loss of 227.78 billion yen, against a year-earlier profit of 475.30 billion yen, as revenue tumbled 12.9 percent.
Sony said it was hit by the weak economy, a stronger yen and the falling value of its investments. But the net loss was smaller than its forecast for a 150-billion-yen shortfall.
"The business environment has been extremely severe," Sony's chief financial officer, Nobuyuki Oneda, told reporters.
"The rapid appreciation of the yen as well as the sharp decline of Japanese stocks significantly affected our company's earnings." For the current business year to March, Sony expects a net loss of 120 billion yen and an operating deficit of 110 billion yen.
"We expect the first half of this fiscal year will continue to be difficult," said Oneda. "Some improvement should be seen from the second half." Sony's chief executive Howard Stringer is slashing 16,000 jobs and axing about 10 percent of the group's manufacturing plants in an effort to return the company to the black.
The company said Thursday it would close three domestic factories as part of its restructuring, but did not announce any new job cuts.
Sony has had a difficult few years in the face of tough competition from rival products such as Apple's iPod and Nintendo's Wii, but had been enjoying a recovery before the current economic downturn began.
Stringer, a Welsh-born American who became the first foreign chief at one of Japan's most famous companies in 2005, recently tightened his grip on power at the group, taking over the post of president from Ryoji Chubachi.
Other Japanese high-tech giants have also been badly affected by the global economic slowdown, which has pushed down demand for their products and sent the yen soaring, eroding export earnings.
Sanyo Electric Co. reported an annual net loss of 93.23 billion yen (976 million dollars) but said it expects to break even this year.
Hitachi announced Tuesday an annual loss of 787.3 billion yen (8.1 billion dollars), the biggest ever deficit posted by a Japanese manufacturer.