Tokyo - Sony unexpectedly forecast an annual loss after the Tokyo market closed yesterday as chief executive Kazuo Hirai struggles to revamp its money-losing television business while The Amazing Spider-Man 2 slides down the box-office charts.
The net loss would probably be ¥50 billion (R5bn) in the 12 months to March next year, the company said in a statement. Analysts had expected a ¥57.1bn profit after Sony made a ¥128.4bn net loss last year.
Hirai, who cut last year’s forecast for net income three times, is trying to overcome slumping demand for the televisions and personal computers (PCs) that underpinned Sony’s rise into a Japanese icon. It is cutting 5 000 more jobs and selling assets as it tries to find new hits to build on successes with smartphone camera sensors and the PlayStation 4 game console.
“Sony may want to exit from the television business, but it does not have other home appliance products to cover it,” Yoshiharu Izumi, an analyst at Navigator Platform, said. “The outlook is not rosy.”
Sony rose 1.1 percent to close at ¥1 805 in Tokyo before the announcement, narrowing its loss this year to 1.2 percent.
Operating profit would probably be ¥140bn this year, the company said. That compares with a ¥26.5bn profit last year. The company has forecast annual sales of ¥7.8 trillion.
When Hirai took over as chief in 2012, he said Sony’s revival would be driven by games, imaging products and mobile devices. Since then, the company has announced job cuts, an agreement to exit PCs and a restructuring to make television manufacturing a separate unit. Hirai has trimmed the television product line-up to focus on larger-screen models.
Sony has sold its Gracenote audio-recognition software business to Tribune, as well as stakes in Japanese satellite broadcaster SKY Perfect JSAT and game maker Square Enix.
Hirai also pledged to make Sony’s television manufacturing unit profitable – a business that has now lost more than ¥700bn over the past 10 years.
Sony said it expected sales this year of 16 million LCD television sets, 8 million cameras, 17 million game consoles and 50 million smartphones.
Spider-Man 2, the biggest release this year for Sony Pictures, has generated more than $146 million (R1.5bn) in US box- office receipts in the two weeks since its launch, though it was ousted from the top spot after one week, researcher Rentrak said. Sony has sequels set for 2016 and 2018.
Sales of the PlayStation 4 surpassed 7 million consoles by April 6, the company said last month. The game machine has outpaced Microsoft’s Xbox One, which has sold more than 5 million units.
Company executives would return their bonuses for the past year, a spokeswoman said on Tuesday.
The company also nominated four new external board directors, whose appointments are subject to approval next month.
Sony controlled 3.8 percent of global smartphone sales last year, data from researcher IDC shows. That ranked the company sixth and compares with about 31 percent for South Korea’s Samsung Electronics.
The company’s film unit has rebounded from a loss in the September quarter after White House Down flopped at the box office. Sony has found success with American Hustle and The Monuments Men, and its studios ranked second in the US in the year through May 11 with about $535.7m of gross receipts, according to Boxofficemojo.com.
The company is also testing an internet-based pay-TV service in the US this year, bringing live and on-demand programming to televisions and its PlayStation consoles.
One of Sony’s successful products has been complementary metal-oxide semiconductors, known as CMOS sensors, that act as digital eyes in smartphones and cameras by Apple and Samsung. – Bloomberg