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Sony Forecasts $1.1 Billion Annual Loss, Will Cut 5,000 Jobs and Sell PC Unit

TOKYO — Sony reported a net profit of Y27.0 billion ($266 million) in the third quarter of its fiscal 2013, ended Dec. 31, 2013, compared with a loss of Y10.8 billion ($106 million) the same period the previous year.

The company also enjoyed an increase in operating profit of Y43.9 billion ($433 million) year-on- year to Y90.3 billion ($890 million).

But for the fiscal year, which ends March 31, 2014, Sony is forecasting a $1.1 billion loss.

The company also announced that it will slash 5,000 jobs to drain red ink from its still-faltering TV and computer operations. In another restructuring move, the company will hive off televisions into a separate unit, while selling its PC biz to an investment firm.

In October, Sony had predicted a 30 billion yen ($295 million) profit, but the turnaround promised by Sony topper Kazuo Hirai is proving harder than expected.

Sony attributed the recent gains to positive exchange rate fluctuations, as well as to improvements in the performance of its Home Entertainment and Sound segment, which includes its long-ailing television biz, and its Game segment, which has benefitted from the successful launch of the PlayStation 4 console.

In the Pictures segment operating income fell by Y1.1 billion year-on-year to Y24.3 billion ($239 million), with the slide caused by relatively lower B.O., as well as higher costs for new shows for U.S. network TV. Overall, however, segment sales gained 7.1% to Y234 billion ($2.3 billion) due to the weakening of the yen against the dollar.

B.O. highlights for the quarter, including “Captain Phillips” and “Cloudy with a Chance of Meatballs 2,” could not match the previous year’s outstanding B.O. performance of “Skyfall” and the home entertainment releases of “The Amazing Spider-Man” and “Men in Black 3.”

One bright spot in Sony’s fiscal third quarter of 2013 was the TV series “Breaking Bad,” which reaped strong SVOD and homevideo revenues.

Sony expects to complete the job cuts by March 2015, while shaving 100 billion yen ($985 million) in fixed costs.

The company has sealed a deal with Japan Industrial Partners, a Tokyo investment firm, to sell off its PC business for an undisclosed sum, with Sony retaining a 5% stake. (Recent rumors had erroneously linked the Vaio computer division to China’s Lenovo.) Sony also plans to split off its television biz into a new company by July.

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