Sony loses $1bn in 2008
First annual loss in 14 years
Sony lost over $1bn during its 2008 fiscal year which ended in March. It's the company's first annual loss in 14 years, and it expects to lose even more in the year ahead.
The Japanese electronics conglomerate reported today its worldwide sales were down 12.9 per cent for the year. The slump was blamed on a strong Yen combined with an overall lowered demand for electronics in the economic downturn. Sony's continuing loss of its lead in music players and gaming by Nintendo and Apple went unmentioned.
Sony's losses during fiscal 2008 totaled 98.9bn yen ($1.04bn, £685m). That's actually better than the 150bn loss Sony had forecast in January, thanks to TV prices holding better than expected and a one-time gain from a change in Japanese tax laws.
The company expects to say in the red next year too, projecting a 120bn yen loss ($1.26bn, £825m) for its current fiscal year ending March 2010.
When things started looking bad last December, Sony announced a major cost-cutting regime that would see the closing of five production sites and elimination of as many as 160,000 jobs by 2010. Now under the rule of its new CEO Howard Stringer, who came in promising to shake things up, the company plans on doing more.
Sony said today it is shutting down three additional plants in Japan, reducing the total number of plants worldwide to 49. The company now hopes to reduce costs by 300bn yen for 2010.
Each of Sony's segments saw a drop in sales. Revenue from the company's gaming division was down 18 per cent, largely due to declining popularity of its long-in-the-tooth Playstation 2 outweighing a rise in sales of the PS3.
Sales in the electronics business declined 17 per cent. Sony's Bravia LCD TVs were on the upswing, but sales of Handycam video cameras, Cyber-shot digital cameras, and VIAO PCs were all down.
Revenue for Sony's entertainment biz was down 16.4 per cent. The company said motion picture revenue was up, driven by Hancock, Quantum of Solace, and Mall Cop. TV revenue grew from increasing revenue from several international channels, Sony said.
Both gains, however, were offset by losses in home entertainment revenue, which the company blames on the global recession and less films being sold to the home entertainment market. ®