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Forums - Sony Discussion - sony cuts profit forecast

Ail on 23 October 2008
tuoyo said:
Ail said:
Quite amazing the number of people that comment stuff without reading the original post or not having a clue about economy....

The best comments are still those of the kind :
- They are cutting profit
=> They are going bankrupt then ?
ROFL

Usually the first 2 steps before going bankrupt are :
- Loose money on a regular basis, Sony isn't announcing they are going to loose money
- Run out of cash and being unable to borrom more. You can loose cash for years and still not go bankrupt if you have decent reserves or access to huge credit....

Actually you can go bankrupt without ever losing money because you manipulate your accounts (such as happened with Parmalat and I think Enron). Also Arthur Anderson died without ever having lost money due to the fact the nature of their business means they rely on their reputation and the Enron paper shreading issue meant their reputation was damaged beyond repair.

Anyway we know Sony can't go bankrupt.  That's impossible.  There would have to have been too many negligent decisions on a massive scale for that to happen.

 

 

That's rhetorical :)

Enron was loosing money for the last few years but hiding it through some book fixing and 'creative' accounting...

 

But yes, I suppose you could go bankrupt by borrowing huge amounts of money while being profitable and suddenly being unable to repay those loans...

 



PS3-Xbox360 gap : 1.5 millions and going up in PS3 favor !

PS3-Wii gap : 20 millions and going down !

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blazinhead89 on 23 October 2008
ahcheng said:
@Espresso
this loss may force sony to close its ps department lol.

*FACEPALM*

xenophon13 on 23 October 2008

Thanks to Ail for being the voice of reason.



kitler53 on 23 October 2008

...sony makes what i would consider "luxury" products which is a hard sale in a poor economy like this. the fact that they are making any profit (i'm assuming that since this is a forecast not a report) is probably good enough for them atm.



URNotE on 23 October 2008

wow some people here are senseless



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Ail on 23 October 2008
kitler53 said:
...sony makes what i would consider "luxury" products which is a hard sale in a poor economy like this. the fact that they are making any profit (i'm assuming that since this is a forecast not a report) is probably good enough for them atm.

 

They are getting hit real hard by the exchange rate too.

So far they were holding steady thanks to the euro market as the yen and the euro while raisin against the dollar had kept on par with each others.

But for the last few months the yen has remained strong while the euro and the dollar dropped in value.

This can have a very very bad effect on profit ( less on sales).

If you make 20% profit on a item sold in Europe and suddenly the euro/yen conversion rate changes by 10%, half your profit is gone without you doing anything.....

 

 

 



PS3-Xbox360 gap : 1.5 millions and going up in PS3 favor !

PS3-Wii gap : 20 millions and going down !

loy310 on 23 October 2008
Ail said:
kitler53 said:
...sony makes what i would consider "luxury" products which is a hard sale in a poor economy like this. the fact that they are making any profit (i'm assuming that since this is a forecast not a report) is probably good enough for them atm.

 

They are getting hit real hard by the exchange rate too.

So far they were holding steady thanks to the euro market as the yen and the euro while raisin against the dollar had kept on par with each others.

But for the last few months the yen has remained strong while the euro and the dollar dropped in value.

This can have a very very bad effect on profit ( less on sales).

If you make 20% profit on a item sold in Europe and suddenly the euro/yen conversion rate changes by 10%, half your profit is gone without you doing anything.....

 

 

 

So expect every other company to gain less than they predicted, Sony wont be the only one getting hit by the dollar and euro value drop.

 



Ail on 23 October 2008
loy310 said:
Ail said:
kitler53 said:
...sony makes what i would consider "luxury" products which is a hard sale in a poor economy like this. the fact that they are making any profit (i'm assuming that since this is a forecast not a report) is probably good enough for them atm.

 

They are getting hit real hard by the exchange rate too.

So far they were holding steady thanks to the euro market as the yen and the euro while raisin against the dollar had kept on par with each others.

But for the last few months the yen has remained strong while the euro and the dollar dropped in value.

This can have a very very bad effect on profit ( less on sales).

If you make 20% profit on a item sold in Europe and suddenly the euro/yen conversion rate changes by 10%, half your profit is gone without you doing anything.....

 

 

 

So expect every other company to gain less than they predicted, Sony wont be the only one getting hit by the dollar and euro value drop.

 

 

This will mainly affect companies based in countries whose currency becames stronger compared to the Dollar/Euro or companies having their product manufactured in those type of countries.

In practice, mainly Japanese companies...

 

American companies with a huge part of their sales in Europe will be affected a little too though as the dollar has regained some ground compared to the euro since this summer.

It used to trade at $1.57 per Euro and now is up to something like $1.29 per Euro.

 

Japanese companies are affected a lot more due to the majority of their sales taking place in Euroland or US, that's less the case for US companies...( part of the sales done in US isn't affected by the change in dollar value).



PS3-Xbox360 gap : 1.5 millions and going up in PS3 favor !

PS3-Wii gap : 20 millions and going down !

shams on 23 October 2008

Ouch - operating income for the last qrt for down 90% on last year! A lot of this was because they sold their HQ last year, for a one-off profit of 60bn yen (about half the profit) - but a lot of the rest was their financial segment dragging the company down.

Income before tax was down 95% on previous year!

...

Their sales forecast hasn't dropped by much - in fact their overall sales projection has barely budged (around 2% down).

I can only think its losses from the financial segment for the entire FY eating into profit for the entire company.

Bravia sales forecast down around 5% - not much at all.

...

This says it all:

Foreign exchange rates impact:approx.-130 bln yen
Stock market decline:approx.-60 bln yen
SONY BMG becoming wholly owned:approx.+ 10 bln yen
Slowing economy & intensification of price competition:approx.-90 bln yen
Total approx.-270 bln yen

 



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goddog on 23 October 2008
Ail said:
loy310 said:
Ail said:
kitler53 said:
...sony makes what i would consider "luxury" products which is a hard sale in a poor economy like this. the fact that they are making any profit (i'm assuming that since this is a forecast not a report) is probably good enough for them atm.

 

They are getting hit real hard by the exchange rate too.

So far they were holding steady thanks to the euro market as the yen and the euro while raisin against the dollar had kept on par with each others.

But for the last few months the yen has remained strong while the euro and the dollar dropped in value.

This can have a very very bad effect on profit ( less on sales).

If you make 20% profit on a item sold in Europe and suddenly the euro/yen conversion rate changes by 10%, half your profit is gone without you doing anything.....

 

 

 

So expect every other company to gain less than they predicted, Sony wont be the only one getting hit by the dollar and euro value drop.

 

 

This will mainly affect companies based in countries whose currency becames stronger compared to the Dollar/Euro or companies having their product manufactured in those type of countries.

In practice, mainly Japanese companies...

 

American companies with a huge part of their sales in Europe will be affected a little too though as the dollar has regained some ground compared to the euro since this summer.

It used to trade at $1.57 per Euro and now is up to something like $1.29 per Euro.

 

Japanese companies are affected a lot more due to the majority of their sales taking place in Euroland or US, that's less the case for US companies...( part of the sales done in US isn't affected by the change in dollar value).

the dollar has also gained on the euro as stated in OP, with that it is becoming better to shift goods to america than euroland. if the euro keeps on its current trend it will be worth a little less than the dollar by january. though anything from the election to congress to peoples moods could change that

 



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