Sony Announces Seventh Consecutive Net Loss

on Nov 1, 2012
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Sony, Japan’s biggest electronics exporter, posted its 7th straight quarter of net loss due to falling demand for its TVs and tough competition from Apple (NASDAQ:AAPL) and Samsung Electronics (KRX:005930).

The company announced it registered a ¥15.5 billion (£156.2 million) net loss or a ¥15.41 (£0.124) loss per share, which is ¥11.5 billion (£89 million) less compared to the same period last year. Sales increased by 1.9 percent year-on-year to ¥1,604.7 billion (£12.75 billion) primarily due to a significant increase in sales in the Mobile Products & Communications (MP&C) segment, while sales in the Home Entertainment & Sound (HE&S) segment plunged due to a drop in LCD television unit sales.

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“Sony is reaching a dead end in terms of creating a successful product,” opined Junya Ayada, an analyst at Tokyo’s Daiwa Securities. “Sony’s market share in TVs will probably continue falling and lead to additional cost cuts in the next fiscal year and the following year unless they find a hit product.”
Sony is in the process of shedding 10,000 jobs and selling a large part of its assets as the CEO Kazuo Hirai tries to navigate the company towards mobile devices, games and digital imaging. After four years of losses Sony is making a concerted effort to turn itself around, selling a chemical-product unit, stakes in two display-making ventures and invested in Olympus (TYO:7733) in an attempt to revive growth.

!m[Japanese Electronics Maker to Steer Away from TVs and Towards Mobile Devices, Games and Digital Imaging](/uploads/story/691/thumbs/pic1_inline.png)The company also revised downward its August consolidated sales forecast for the current fiscal year by ¥200 billion (£1.55 billion) to ¥6.6 trillion (£51 billion), primarily because the annual unit sales forecasts for key products are expected to be below previous estimates. Despite a continuation of the “severe operating environment” in a highly uncertain economic situation, the company is not lowering its operating income forecast for the whole year, which is set at ¥130 billion (£1.0 billion).

Shares in the company dropped by 4.09 percent to ¥915 a share in today’s Tokyo trading session and the price is expected to slide further down tomorrow as the market reacts to the second-quarter financial results.

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