Sony sinks to $199 mln quarterly loss on disaster
Thursday, July 28, 2011
TOKYO (AP) — Sony Corp. sank to a 15.5 billion yen ($199 million) quarterly loss, hurt by the disasters in northeastern Japan, a massive online security breach and plunging TV prices.
The Tokyo-based electronics and entertainment company said Thursday it had lowered its profit forecast for the fiscal year ending March 2012 to 60 billion yen ($769 million) from 80 billion yen ($1 billion) it gave in May.
But that would still mark a return to profit for the maker of the PlayStation 3 game console, Bravia TVs and Vaio laptops after three straight years of red ink.
Sony posted a 25.7 billion yen profit in the April-June period of 2010.
It said business operations hurt by the March 11 earthquake and tsunami were recovering quicker than initially expected, but it suffered net charges of 700 million yen ($8 million) in repairs, cleaning costs, damages to buildings and assets and other expenses.
Sony acknowledged the cyber attacks on its network services had forced a temporary shut down. The PlayStation Network and other services were restored earlier this month in all countries.
The global security breach affected more than 100 million online accounts. Sony has said it will book a special charge of 14 billion yen ($179 million) to cover costs of customer support, freebie packages, legal costs, lower sales and measures to beef up security during the current fiscal year.
Sony also lowered its sales forecast for the fiscal year ending March 2012 to 7.2 trillion yen ($92 billion) from 7.5 trillion yen ($96 billion). But that’s still better than sales of 7.18 trillion yen in the previous year.
Sony blamed the reduced forecast on lower sales of flat-panel TVs, plunging prices and the strengthening of the yen against the dollar, which is hammering Japanese exporters.
Sony has lost money for seven straight years in its important TV business, but has vowed to be back in the black this fiscal year. The TV division remained in the red for the April-June period.
Sony was once the star in electronics products like TVs and digital players, but in recent years has lost its luster in the face of rivals, including Samsung Electronics Co., from which Sony buys liquid crystal displays for its TVs, and Apple Inc., with its iPod, which quickly made the Walkman obsolete.
Sony’s April-June sales slipped 5 percent to 1.49 trillion yen ($19 billion).