Sony posts first loss in 14 years

[Naveed Yaseen]

TOKYO: Sony Corp announced Thursday its first annual loss in 14 years and warned it would stay in the red this year as the global economic downturn inflicts heavy damage on Japan’s high-tech giants.

The maker of Bravia televisions, PlayStation game consoles and Cyber-shot cameras said it would shut more plants as it braces for its first back-to-back annual losses since it was listed on the stock market in 1958.

Sony suffered its biggest ever operating loss of 227.8 billion yen ($2.4 billion) in the business year to March, a dramatic turnaround from the previous year’s profit of 475.3 billion yen.

It posted a net loss of 98.9 billion yen, against a year-earlier profit of 369.4 billion. The loss was about one-third smaller than Sony had forecast. “The business environment has been extremely severe,” chief financial officer Nobuyuki Oneda told reporters. “The rapid appreciation of the yen as well as the sharp decline of Japanese stocks significantly affected our company’s earnings.”

For the current business year to March, Sony expects a net loss of 120 billion yen and an operating deficit of 110 billion yen. “We expect the first half of this fiscal year will continue to be difficult,” said Oneda. “Some improvement should be seen from the second half.”

Sony’s chief executive Howard Stringer is slashing 16,000 jobs and axing about 10 per cent of the group’s manufacturing plants in an effort to reduce costs by 300 billion yen a year. The company said Thursday it would close another three domestic factories as part of its restructuring but announced no new job cuts.

Some analysts believe the group needs an even more drastic overhaul. “The company says some improvement may be seen in the second half of the fiscal year, but I’m afraid it is too optimistic,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

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