Sony Suffers First Annual Loss in 14 Years
May 14th, 2009Via: New York Times:
Sony reported its first annual loss in 14 years on Thursday and forecast another grim year ahead, as the prolonged economic slump and a strong Japanese yen dashed hopes for a quick recovery at the electronics giant.
Facing more losses ahead, Sony said it would close three factories in Japan, part of a continuing effort to trim production costs and rebuild a business that has been ravaged by the sharp cutback in consumer spending worldwide.
Sony expects to book a net loss of ¥120 billion, or $1.26 billion, in the business year ending in March 2010, after a loss of ¥98.9 billion in the year that just concluded. That shortfall, while substantial, beat Sony’s forecast of a ¥150 billion loss, partly because of a one-time gain from a change in Japanese tax laws.
Like other Japanese exporters, Sony is reeling from a decline in sales overseas, as well as in Japan, which is mired in its worst recession in decades. A stronger yen, which erodes overseas revenue and inflates production costs at home, has also weighed heavily on its bottom line.
Sales for the 2009 financial year fell 12.9 percent from a year earlier, to ¥7.73 trillion. The slump deepened in the most recent quarter, falling 22 percent to ¥1.52 trillion.
But those factors mask more fundamental problems at the Tokyo-based manufacturer.
Once an electronics powerhouse and hip innovator, Sony’s dominance has been usurped in almost everything it makes by rivals with savvier marketing and less expensive products that are easier to use.
