Bloomberg
Sony Corp. (6758), Japan’s biggest consumer- electronics exporter, unexpectedly posted its seventh straight quarterly loss on falling demand for its TVs as consumers flock to Apple Inc. (AAPL) and Samsung Electronics Co. devices.
The net loss totaled 15.5 billion yen ($194 million) in the three months ended Sept. 30, compared with a net loss of 27 billion yen a year earlier, the Tokyo-based company said in a statement today. That compared with the 15.6 billion-yen average profit of three analyst estimates compiled by Bloomberg. Sony maintained its full-year profit forecast of 20 billion yen while cutting its sales estimate.
Sony is cutting 10,000 jobs and selling assets as Chief Executive Officer Kazuo Hirai focuses on mobile devices, games and digital imaging after four consecutive annual losses. Sony sold a chemical-products making unit, stakes in two display- making ventures and invested in Olympus Corp. to revive growth after racking up 692 billion yen in losses selling TVs in the past eight years amid competition with market leader Samsung.
“TV sales are worsening this year amid economic downturns in the U.S. and Europe,” said Junya Ayada, an analyst at Daiwa Securities Co. in Tokyo. “As the global recession continues, consumers are no longer spending much money on electronic products, as they now have a smartphone that can satisfy most of their needs.”
Hirai is investing in businesses including Olympus Corp. (7733) to revive growth after racking up 692 billion yen in losses selling TVs in the past eight years.
Estimates Cut
The shares fell 4.1 percent to 915 yen in Tokyo trading today, extending the loss this year to 34 percent.
Sony cut its annual TV sales target to 14.5 million units from 15.5 million units, the company said in a statement today. Compact camera sales estimate was reduced to 16 million units from 18 million units.
Sony’s run of four straight full-year losses, the worst since it listed in 1958, and a stronger yen pushed the shares to an intraday low of 849 yen on Sept. 5. That’s the lowest level for the stock since April 1980, according to data compiled by Bloomberg.
Worth over $120 billion in 2000, the maker of Walkman music players is now valued at about $11 billion, compared with $560 billion for Cupertino, California-based Apple and $175 billion for Suwon, South Korea-based Samsung.
Job Cuts
Sony, the world’s third-largest TV maker, will cut 10,000 jobs, or about 6 percent of its workforce, slash costs, reduce the number of TV models and consider an alliance on batteries for electric cars, Hirai said in April after taking over from Howard Stringer. In August, Sony said the main TV business may lose about 80 billion yen in the 12 months to March 31, remaining unprofitable for a ninth consecutive year.
Sony is ahead of its plan to turn around the TV business, Hirai said in October. The company has halved the number of Bravia models sold in the U.S. and Japan to a combined 39 from 79.
The company ended a TV panel venture with Sharp Corp. earlier this year after closing down a similar partnership with Samsung last year as part of efforts to trim costs.
Industrywide TV demand fell 8 percent from a year earlier in the second quarter of this year, according to DisplaySearch, led by a 77 percent plunge in shipments in Japan. Sony’s domestic peers Panasonic Corp. (6752) and Sharp also posted record losses last year mainly because of falling demand at the TV unit.
Panasonic’s Forecast
Panasonic yesterday said it will post a loss of 765 billion yen in the year ending in March, scrapping an earlier forecast for a profit of 50 billion yen.
Canon Inc. (7751), the world’s top camera maker, last week slashed its profit forecast for 2012 because of slower sales growth as consumers switch to taking pictures with smartphones. Sony competes in the camera market with its Cyber-shot, Alfa and NEX models.
Last week, Samsung, the world’s biggest maker of TVs, phones and memory chips used in computers, reported record profit that beat analysts’ estimates. Samsung is Asia’s largest consumer-electronics company.
To focus more on the mobile-phone business, Sony last year bought out Ericsson AB’s stake in their venture making Xperia handsets. Hirai also is boosting production capacity of image sensors and agreed in July to acquire U.S. gaming platform company Gaikai Inc. for about $380 million as Sony prepares to expand its cloud-based entertainment business.
In September, Sony agreed to invest 50 billion yen in Olympus, the world’s biggest maker of endoscopes that admitted to a 13-year accounting fraud last year. Under the agreement, Sony will buy an 11.46 percent stake and become the largest shareholder in two steps. The two companies will set up a joint venture by Dec. 31 to develop, make and sell new endoscopes and other medical devices, they said in September.
Last month, Sony completed the sale of Sony Chemical & Information Device Corp. to Development Bank of Japan (8301) for 57.2 billion yen. The company in June also sold a 7 percent stake in a display venture with Sharp Corp. for 10 billion yen in June.
http://www.bloomberg.com/news/2012-11-01/sony-posts-7th-straight-loss-as-tv-sales-slump-on-economy.html
