JAPAN’S SONY flagged a record $6.4 billion (€4.9 billion) annual net loss, double an earlier forecast. It marks a fourth year of red ink, as the company writes off deferred tax credits, heaping more pressure on its new chief executive to turn around the electronics giant.
Sony, which plans to axe 10,000 jobs – 6 per cent of its global workforce – according to media reports this week, has been hammered by weak demand for its televisions and overtaken by more innovative gadget rivals such as Apple and Samsung Electronics.
Yet, in a bid to ease investor concerns over its deteriorating bottom line, Sony forecast it would bounce back in the current year to end-March 2013 with an operating profit of 180 billion yen (€1.7 billion).
In a sign that Sony’s woes are industry-wide among Japan’s consumer electronics firms, LCD TV maker Sharp yesterday also raised its full-year net loss forecast to €3.57 billion.
Kazuo Hirai, who took over as Sony’s chief executive this month, has said he is prepared to take “painful steps” to revive the company, insisting he would not hesitate to scale back or withdraw from businesses he deemed uncompetitive. He will lay out his revival strategy in more detail at a briefing scheduled for tomorrow.
The Sony veteran, known for reviving the PlayStation gaming operations through aggressive cost-cutting, has promised to get the struggling TV business – which has lost $10 billion alone in 10 years – back on its feet in two years.
“There have been several reasons for our poor results,” chief financial officer Masaru Kato said at a news briefing in Tokyo yesterday, noting a strong yen and poor demand.
Asked whether the ballooning losses would cause heads to roll among Sony executives, Mr Kato said: “We are aiming for a rebound and for this we have made management changes.”
Sony securities traded in Germany slumped. In Tokyo, shares closed down 3.5 per cent ahead of the announcement, the biggest one-day drop in three weeks in a flat market. Sony stock has almost halved in little more than a year, and has dropped 11 per cent in the past 10 trading sessions.
