Annual sales fall 9.6% to $81 billion
TOKYO Sony posted a record $5.7 billion loss for its latest fiscal year but execs see a light at the end of tunnel, predicting a return to profitability this year.At Sony Pictures, which recently announced a major restructuring that catapulted studio topper Michael Lynton to the head of Sony Corp. of America, revenue rose 18% although profits fell on a gain the year earlier and higher marketing costs. Sony cited flagging electronics, natural disasters and slower demand for its fourth straight year in the red. Annual sales slid 9.6% to $81 billion. Sony’s fiscal year ends in March. Losses for its fourth quarter totaled $3.2 billion. The struggling conglom cited the devastating 2011 earthquake in Japan a year ago and flooding in Thailand, which slowed production, as well as economic turmoil in much of the developed world that squeezed sales. The continuing strength of the yen against major currencies also cut into profits last year. More fundamentally, Sony’s core electronics biz has long been ailing, with sales of TVs, once a bastion of strength, sliding for eight consecutive years. Despite aggressive cost cutting by previous chairman Howard Stringer, Sony products have been consistently underpriced and outsold by their Asian rivals. Current topper Kazuo Hirai, who took over in April, has vowed to refocus the company on new profit centers, including smart phones, games and medical devices, while cutting head count by 6%. The stock market has continued to batter Sony shares, however, sending them sinking to a 25-year low last week. At a press conference Thursday, Sony officials predicted a return to profit for the fiscal year ending March 2013, with earnings of $375 million. They also noted that the year-on-year loss was less than the previously forecast $6.5 billion. The company sees sales this fiscal year growing 14% to $481 billion. Sony Pictures’ revenue jumped 18% to $8.25 billion thanks to merchandising rights sales for the “Spider-Man” franchise, higher pay TV and VOD revenues from theatrical pics, stronger network and cable programming sales and growth in ad sales from SPE’s networks in India. But its profit fell nearly 12% to $428 million on tough comps from the year before, which included a one-time $380 million gain, higher marketing costs for theatrical pics and the appreciation of the yen against the dollar. Lynton, who was been running the studio with Amy Pascal, is effectively taking the job held by Stringer for years before he was tapped to run the conglom. Hirai has acknowledged he’ll be fully focused on other areas of the company and the U.S. operations need a full-time chief. At Sony’s key consumer products and services segment, sales were down 18.5% to $39.4 billion, with a slump in sales of LCD TVs, PCs, digital cameras and games. The decline in the game biz was attributed to price cuts that lowered revenues for the PlayStation 3 console and slower sales for PlayStation 2 as users abandon the outdated platform. Sony predicted that studio revenue will continue to grow this year on a strong theatrical slate, TV sales and overseas channels.
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