NJ5 on 15 January 2009
| tuoyo said: How can you forecast $2.2bn profit in October and in January it is looking like a loss of $1bn? That's a difference of 3.2bn in only 3 months!!! If this is real then Sony must have the worst financial analysts in history. It's not like the economy wasn't already in a downturn by October. |
Actually it is quite understandable. Sony usually has $90-$100 billion in revenue per year. Their profit margins are usually 1-4% (lately more to the 1% side), which means they usually have around $1-$4 billion in profit. If this profit margin reverses into a loss margin of equal size, you're quickly looking at $1-$4 billion in losses instead.
They're extremely vulnerable to the exchange rates, and with such profit margins the difference between posting their regular profits and these losses is not that big.
As you can see, having huge revenue is not all roses.
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