From Bloomberg:
From Bloomberg:
Sony Projects First Loss in 14 Years as Demand Falls
c.2009 Bloomberg News
By Pavel Alpeyev and Junko Hayashi
Jan. 22 (Bloomberg) — Sony Corp., the world’s second- largest maker of consumer electronics, forecast its first annual loss in 14 years as the deepening worldwide recession erodes demand and the company books costs to reorganize its business.
The net loss will be 150 billion yen ($1.7 billion) for the 12 months ending March 31, Tokyo-based Sony said in a statement today. The deficit compares with the 74 billion yen median loss estimate in a Bloomberg survey of five brokerages and the 150 billion yen profit the company forecast in October.
The worsened outlook raises pressure on Chief Executive Officer Howard Stringer, who has pledged to raise Sony’s operating profit margin to 5 percent. Recessions in Europe, Japan and the U.S. have cut consumer spending, with Daiwa Institute of Research Ltd. predicting flat-panel television sales will fall in 2009 for the first time this decade.
Sony “has to go back to square one and cut costs and reduce inventory,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co., which oversees about $6.1 billion in Tokyo. “Sony’s TV sales have expanded but the business remains unprofitable, meaning its cost control is still sloppy.”
The net loss is the first since the year ended March 1995, when Sony posted a deficit of 293.4 billion yen. Sony’s TV business, its largest by revenue, hasn’t posted an annual profit since the year ended March 2004.
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