Sony sees record $6.4 billion net loss, to take tax hit

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(Reuters) - Sony Corp forecast a record $6.4 billion net loss for the business year just ended, double earlier forecasts and a fourth straight year of losses, inflated by writing off deferred tax assets in the United States.

In a bid to ease investor concerns over its deteriorating bottom line, the Japanese consumer electronics giant said it would bounce back this year and make an operating profit of 180 billion yen.

Sony, which plans to axe 10,000 jobs - around 6 percent of its global workforce - according to media reports this week, has been hammered by weak demand for its televisions and been overtaken by more innovative gadget rivals such as Apple Inc and Samsung Electronics.

Kazuo Hirai, who took over as CEO this month, has said he is prepared to take "painful steps" to revive the company and would not hesitate to scale back or withdraw from businesses if they were not competitive.

The Sony veteran, known for reviving the PlayStation gaming operations through aggressive cost-cutting, has promised to get the struggling TV business - which has lost $10 billion alone in 10 years - back on its feet within two years.


GRAPHIC: Sony earnings r.reuters.com/vah46s

GRAPHIC: Sony staff details r.reuters.com/kam57s


BREAKINGVIEWS-Sony resets ahead of reboot [ID:nL4E8D25KU]


Sony forecast a 520 billion yen ($6.4 billion) net loss for the year to end-March 2012. In February it had forecast an annual net loss of 220 billion yen. The additional loss is from write-offs of tax credits in the United States, which the company cannot use because of the losses it has racked up.

Analysts had forecast a full-year loss of 214 billion yen, according to Thomson Reuters I/B/E/S.

"To bring Sony back, Hirai needs to develop personnel and platforms that create competitive and innovative products, but that will be a formative task after a lot of talent left under early retirement plans," said Tetsuru Ii, president of Commons Asset Management, who oversees about 2.7 billion yen worth of assets and does not hold a stake in Sony.

"The old Sony culture would only allow it to make things that were the best globally. Under that logic, does it make sense for Sony to continue its TV business, when it's not even the market leader in Japan?

"In terms of management philosophy, (Hirai) will have to choose and focus the company's business activities."


Some analysts believe Hirai, a fluent English speaker, can rekindle the Sony flame, saying he has a good grasp of the business and is likely to know how to break down its silos and integrate its divisions.

A key concept in Hirai's strategy hinges on merging Sony's robust roster of entertainment properties - including singers Kelly Clarkson and Michael Jackson, and the "Spider-Man" and "Men in Black" film franchises - with its Vaio, Bravia and other electronics brands, in an effort to boost sales.

He has said the TV business would be crucial to this "convergence" strategy, brushing aside suggestions it may need to pull out of the market.

Recently, Sony exited an LCD panel venture with Samsung, enabling it to obtain screens for its TVs more cheaply. It also agreed to buy out Ericsson's half of their smartphone venture for $1.5 billion to shore up its position in a market where Apple and Samsung have become leaders.

Hirai, who was promoted from head of Sony's consumer products and services businesses that produce the bulk of Sony's $85 billion in annual sales, has also singled out medical as a potential core business for the future.

Sony shares closed down 3.5 percent ahead of the announcement on Tuesday, its biggest one-day drop in three weeks. The benchmark Nikkei average ended around 0.1 percent lower. The stock has almost halved since little more than a year ago, and has dropped 11 percent in the past 10 trading sessions.

The annual results are due on May 21. ($1 = 81.3900 Japanese yen)


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burning through that cash reserve quick there, soon they will be ripe for hostile take over

come play minecraft @  mcg.hansrotech.com

minecraft name: hansrotec

XBL name: Goddog

Sony Music should leave iTunes and have there music exclusively on their digital store like music unlimited.


Bet with gooch_destroyer, he wins if FFX and FFX-2 will be at $40 each for the vita. I win if it dont

Sign up if you want to see God Eater 2 get localized!! https://www.change.org/petitions/shift-inc-bring-god-eater-2-to-north-america-2#share

I am not that familiar with US Taxes. Do I get this right that they have to say good bye to the opportunity to save taxes for future profits?!

The German translation varies from "Steuererleichterung" to "Steuergutschrift", which are totally different. Would be nice if you guys could explain this. Maybe even give the right translation.

There once was a great sig here, but it got killed.

A moment of silence would be appreciated.

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I think they need to axe TV division completly.


6.9 billion? Double forecast?
Me sad


Now that's just painfull, I hope Kaz isn't too litte too late, they can't afford two more bad years.

I wonder how much PS3's can be made for that kind of money.

This might be why Sony doesn't seem to be going all out with their PS4 (If the rumors are to be believed), as they want to make profit on it from day 1. Anyway i hope they can pull them selfs out of this mess.

It's all our fault!! we didn't buy enough ps3 games!!


Face the future.. Gamecenter ID: nikkom_nl (oh no he didn't!!)