Kazua Hirai’s welcome atop Sony Corp. was a sobering one as the conglom continues to swim in red ink, reporting a ¥159 billion ($2.09 billion) net loss for the October-December quarter.
It also predicted a much wider than expected $2.89 billion loss for the fiscal year ending in March on a toxic combination of natural disasters and unfavorable exchange rates along with declines in it core TV business and charges to restructure several joint ventures.
Still, sounding an upbeat note, outgoing prexy and CEO Howard Stringer said, “The stage has been set for recovery.” He will cede the chief executive post to Hirai later this year but stay on as chairman of the board.
Hirai, alongside Stringer at a press conference on Thursday to discuss the latest earnings, pledged to create “new opportunities” by focusing on growing areas like games, mobile devices and medical equipment while coaxing the TV biz back to profitability.
“TV is still an important product in the center of the home…We want to find new ways for consumers to enjoy that product,” he said.
Consumer Products & Services, which houses the struggling television division, saw sales drop 24% and swung to an operating loss of $1.1 billion from an $835 million gain the year before.
Lower sales of PlayStation hardware and higher marketing costs for network service platforms also dinged profits.
At Sony Pictures, revenue rose 15% to $2.06 billion on a higher number of theatrical releases versus the year earlier quarter, consolidation of the Game Network and higher advertising sales in India. Despite a strong showing for “The Smurfs,” home video revenue was down on fewer releases year to year.
Entertainment profits fell $52.5 million to $9.2 million. Sony cited higher marketing costs and the disappointing perf of “Arthur Christmas” that bit into profits, as did a drop in home entertainment sales due to a decrease in releases.
Sony Music saw sales fall 11.7% to $1.58 billion on fewer significant releases during the quarter. Operating income fell 21% to $196 million.
Best selling titles during the quarter included Adele’s “21” and “Live at the Royal Albert Hall,” Susan Boyle’s “Someone to Watch Over Me” and music from Fox’s hit TV show “Glee.”