Red ink was less than half of previous year's
The red ink keeps flowing at Sony. There’s just less of it than there used to be.
The electronics giant posted its second straight year of net losses Thursday, but the 40.8 billion yen ($441 million) was less than half of what it lost last year.
And the good news is expected to keep coming for Sony as the company said it expects to become profitable again this year; it anticipates earning $541 million from sales of $82 billion by the end of the current fiscal year, which ends March 31, 2011, putting it back in the black — a first for the company in three years.
Much of that is due to the extensive cost-cutting measures Sony chief Howard Stringer has been implementing, which included restructuring the company’s executive suites, laying off staffers, closing factories and outsourcing production.
During the current fiscal year, sales fell 6.7% to nearly $78 billion, but Sony was still able to record an operating profit (which does not include taxes) of $342 million.
In the March quarter, the Tokyo-based company posted a net loss of $608 million on revenue of $18.4 billion.
At Sony’s core consumer products and devices division, sales fell nearly 20% to $34.7 billion, with demand softening for Sony’s Bravia LCD TVs, Handycam video cameras and Cybershot digital cameras. Those devices have been Those devices have been hit hard by products from rivals like Korea’s Samsung and Apple.
Sony is betting that a new online service that supplies Sony content to an array of Sony hardware, as well as the skedded June launch of 3D TVs, will help put it back on the path to profitability.
It believes 3D will help it sell 60% more TVs this year, with 10% of the 25 million TVs it hopes to sell being 3D TVs. It also anticipates selling 23 million digital cameras, up from the 21 million it sold this year.
The strong box office haul of pics like “2012,” “Angels and Demons” and “Michael Jackson’s This Is It” helped boost sales in the pictures group by 7% when counting earnings in U.S. dollars. Otherwise, sales edged down 1.7% due to unfavorable exchange rate. While home entertainment revenues fell, TV earnings rose, aided by international sales, with operating income soaring 43% to $326 million.
On the music front, sales were up 35% to $5.6 billion, mostly due to full-year results from Sony Music Entertainment, which was consolidated as a wholly owned subsid starting in October 2008. Music sales alone fell 5% during the year, however, despite strong demand for the Michael Jackson catalog, as well as the “Michael Jackson This Is It” soundtrack, music collections from the teen drama “Glee” and Susan Boyle’s debut album “I Dreamed a Dream.”
In the networked products and services segment, which includes Sony’s PlayStation games division, sales fell 10.2% to $16.9 billion. The segment’s operating loss of $893 million was nearly $48 million less than last year.
Sony attributed the sales drop to the strengthening of the yen, as well as declines in unit sales of PlayStation Portable hardware and PlayStation 2 software.
Brightening the bottom line were higher sales of PlayStation 3 software and hardware, with 13 million units of its high-definition console moving off store shelves in 2009, compared with 10.1 million units the previous year. The company wants to sell 15 million PS3s this year.
(Marc Graser contributed to this report)