January 13, 2009 10:28:00 am
Sony Corp may post an operating loss of about 100 billion yen ($1.1 billion) this financial year,its first such loss in 14 years,due to weak sales and a stronger yen,a source close to the matter said on Tuesday.
Sony shares tumbled more than 8 per cent in Tokyo,following a 1.9 per cent fall in New York,after a media report on the likely loss.
Sony said last month it would cut 16,000 jobs,curb investment and pull out of some businesses to save $1.1 billion a year as the global recession hits demand for its products.
The maker of Bravia flat TVs and PlayStation 3 video game consoles has forecast an operating profit of 200 billion yen for the year to March 31,down from 475.2 billion yen in 2007/08.
But slumping sales and falls in the prices of liquid crystal display (LCD) TVs and digital cameras in the October-December quarter,as well as costs to clear up inventories,will likely send the firm into an operating loss,the Nikkei business daily said. It added that the loss could double to around 200 billion yen depending on inventory conditions in the January-March quarter.
Analysts on average see an annual profit of 18.5 billion yen,a poll of 18 brokerages by Reuters Estimates showed.
Sony spokeswoman Mami Imada said the loss figure was speculation and declined to comment further on the report,which also appeared in Kyodo News and other media. The company is scheduled to announce its quarterly earnings results on Jan. 29.
The loss would be only the second since Sony went public in 1958 and the first caused by troubles in its mainstay electronics business,the ‘Nikkei’ said.
A one-time charge related to the company’s US film studio business was primarily responsible for the previous operating loss,reported for the year that ended in March 1995,it said.
Apart from restructuring charges and possible further losses on exchange rates,Sony is expected to write down roughly 50 billion yen of its holding in Sony Life Insurance Co,the newspaper said.
Many analysts expect Sony to undertake further restructuring steps,but the company this month denied a report in the Times of London newspaper that it planned to announce closures of Japanese factories and major divisions next month.
Sony shares were down 8.4 per cent at 2,010 yen as of 0055 GMT,against a 4.6 per cent slide in the benchmark Nikkei average. The company’s shares fell 1.9 per cent to $23.10 on the New York Stock Exchange on Monday.
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