Tsunami, hacker breach slam tech giant's earnings
As other media companies have trumpeted robust results recently, Sony Corp.’s woes continue.
On Monday, the entertainment and consumer electronics giant said it will report a $3.2 billion net loss for its fiscal year that ended March 31, as it struggles to recover from the impact of the earthquake and tsumani in Japan and the security breach of its PlayStation Network that compromised the personal information of 100 million user accounts.
Warning came in a preliminary earnings announcement. Sony reports on Thursday.
The annual loss will be Sony’s third straight year of red ink, and the largest under CEO Howard Stringer, who assumed the top job in 2005.
The loss this past year was due in part to the writeoff of certain deferred tax assets in Japan that suggest Sony doesn’t believe that next year it will see much improvement.
Sony was forced to shut down 10 plants following the earthquake and tsunami on March 11, taking hits of ¥22 billion yen ($269.3 million) to sales and $208.1 million to operating profit. Nine of those plants are back up and running, but sales have been slower to recover. Sony execs said until the quake they were projecting a recovery in earnings.
The March 11 earthquake and tsunami has trashed earnings and profits of companies across the economic landscape in Japan, especially manufacturers hit by disrupted power supplies, delivery delays and other disaster-related impacts. Also, shaken consumers have tightened their pursestrings on optional purchases, including Sony’s core electronics products.
On Monday Sony did not report specific preliminary numbers for its U.S.-based entertainment assets, including its movie and music businesses.
Earlier this month, Stringer apologized for the hacking incident with PlayStation after Sony offered a year of free identity theft monitoring and $1 million per user insurance coverage. The company said Monday the incident could cost the company $171.4 million in the current fiscal year.
Sony, however, expects to record a positive net proft and $2.4 billion in operating profit for the entire fiscal year, ending in March 2012.
Wall Street must have been anticipating Sony’s bad news. Shares in early trading Monday were down less than a dollar to $26.07.