A series of natural disasters, along with slumping TV sales, continues to take a toll on Sony Corp.’s bottom line, which will cause the company to report a fourth straight annual loss when its fiscal year ends in March.
The film division was a bright spot for the Japanese conglom, thanks to the global success of “The Smurfs.”
Sony posted a 27 billion yen ($346 million) net loss for the second quarter on Wednesday, blaming the red ink mostly on its TV biz and rising value of the yen against major currencies. Revenue fell 9.1% to $20.2 billion compared with the same year-ago period.
For the full year, Sony said it expects to lose $1.2 billion, a reversal of the $768 million profit it initially anticipated in July. The disappointing results come as Sony expects to generate sales of $83.3 billion for the year, off 9.7% from what the company had expected.
Sony’s film division saw revenues rise 29% to $2.1 billion and a profit of $268 million for the quarter, thanks largely to the success of “The Smurfs”; higher TV sales of U.S. network and cable shows; the consolidation of its Game Show Network; ad sales in India; and homevid results. It collected $278 million from the sale of Spider-Man merchandise.
Sony’s bottom line is feeling the brunt from all sides, however.
It’s being hit hard by worsening exchange rates and the impact on production at factories from the recent floods in Thailand. Also affecting it are March’s earthquake in Japan, and slower than expected sales in the consumer products and professional devices and solutions segments.
Its core consumer products and services division, which has suffered from a lack of a must-have gadget on the scale of Apple’s iPod or iPad, or even Sony’s own Walkman years ago, recorded a $449 million loss, as TV sets, its PlayStation 3 videogame console and PCs turned in lower sales.
The PS3, in particular, sold 3.7 million units for the quarter, compared with 3.5 million units during the same frame last year.
But Sony expects to sell 16 million PS3s during the fiscal year, up from 14.3 million. With more PS3s in homes, the division sold 37.4 million PlayStation games, up from 35.3 million. As Sony preps to launch its new Vita handheld, the PlayStation Portable saw sales drop to 8.1 million units from 11 million.
At a presser on Wednesday, Sony executive deputy prexy Kazuo Hirai, who is in line to replace CEO Howard Stringer, unveiled a plan to restore profitability to the TV set biz. The company intends to reduce the number of LCD TVs it makes by 40 million units by March 31, 2013, as announced in 2009, to 20 million units by March 31, 2012.