Corp. forecasts return to black
Hit hard by the March 11 earthquake and tsunami, as well as by the man-made catastrophe of continuing hacker invasions of its sites around the world, Sony Corp. has logged a $3.2 billion net loss for the past fiscal year — marking the company’s biggest loss since 1995 and its third-straight year of red ink.But unforeseen disasters weren’t all to blame. The studio side faced tough comparisons for fiscal 2010 against a strong slate the previous year. The weak box office performance of the costly James L. Brooks comedy “How Do You Know,” as well as lower home entertainment revenues caused operating profits at Sony’s pic biz to be flat for the year at $466 million, on revenue declines of 8% to$7.3 billion. Solid perfs from “The Karate Kid,” “Grown Ups,” and “Salt” were still not enough to offset the decline when compared with the previous year’s slate that included “2012,” “Angels & Demons,” and “Michael Jackson’s This Is It.” Looking ahead, Sony said it is eyeing gains in worldwide theatrical B.O. as well as home entertainment, TV advertising, international channel subscriptions and TV programming earnings. Among the other bright spots last year were growth in international TV channel subs and ad revenues, as well as higher earnings from U.S. cable and syndication. The total impact of the natural disaster will slice $1.83 billion off operating profit this year, Sony estimated, as it struggles to get production of key electronics and other products back to normal levels. On the music side, Sony reported that cost controls on marketing and overhead helped boost operating profits by 7% to $469 million, despite revenue declines of 10% to $5.7 billion. Still, big sellers were Susan Boyle’s “The Gift,” Pink’s “Greatest Hits … So Far!!!,” and music from the cast of the show “Glee.” The networked products and services division, which includes games, recorded an operating profit of $429 million in fiscal 2010-11, compared with a loss of $40 million the previous year. A big reason for the better results were cost cuts to PlayStation 3 hardware and higher sales of PS3 software. Meanwhile, the hack attacks, which began in April with breaches of Sony game and music sites that exposed the personal info of 100 million users, are predicted to cost the company $171 million this fiscal year. Sony predicted, however, that net profit will total $978 million and operating profit $2.45 billion in fiscal 2011, ending in March 2012, with stronger returns from games, PCs and flat panel TVs contributing. For the current fiscal year, Sony foresees higher sales for its games, PCs and network services, but a decline in operating profit as sales of PSP and PSP2 software and hardware continue to slide and expenses pile up for the hacks to the PlayStation Network, Qriocity and Sony Online Entertainment network services. Sales of PS3 consoles are expected to rise of 15 million units, compared with 14.3 million last year.