Sony posts ¥27bn loss

2011-11-02 13:38

Tokyo – Sony booked a net loss of ¥27 billion (R2.8 billion) in the July-September quarter due to the yen’s rise and losses in its television business, the company said today.

Last year, the maker of PlayStation gaming consoles made a net profit of ¥31.1 billion in the same period, but ended the financial year to March with a net loss of ¥259.6 billion.

Sony said it expected to end the current financial year in the red for the fourth straight year, with a net loss of ¥90 billion, a reversal from a net profit of ¥60 billion it had projected three months ago.

The company attributed the downward revision to the yen’s appreciation, slumping sales and output disruptions from the flooding in Thailand. The company was also recovering from the March 11 earthquake and tsunami, which ravaged northeastern Japan.

A strong yen makes Japanese goods more expensive overseas and erodes repatriated earnings.

Sony said it posted an operating loss of ¥1.6 billion for the July-September period, compared with an operating profit of ¥68.7 billion a year earlier, while its sales for the quarter fell 9.1% to ¥1.57 trillion.

The company announced a plan to make its moneylosing television business profitable by the financial year through March 2014. The company would slash television production to 20 million units from 40 million units in 2009.

Last week Swedish telecommunications equipment maker Ericsson said it would sell its 50% stake in mobile phone maker Sony Ericsson to Sony for $1.47 billion (R12 billion).

The deal would enable Sony to include smartphones among its network-connected consumer electronics devices, which currently include tablet computers, televisions and personal computers.

The deal will give Sony ownership of mobile phone patents as well as other patent rights through a broad cross-licence agreement with Ericsson.

Sony chief executive Howard Stringer said Sony’s “four-screen strategy” will help it catch up with major producers of smartphones and tablet computers, such as Apple and Samsung Electronics.

“We can more rapidly and more widely offer consumers smartphones, laptops, tablets and televisions that seamlessly connect with one another and open up new worlds of online entertainment,” Stringer said in a statement.

Shares in Sony dropped 3.55% today.

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