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Sony Posts $1.01B Loss; Details More Cuts

5/14/2009 10:07:00 AM Eastern

UPDATED!  Tokyo — Sony reported a $1.01 billion loss for its fiscal year, ended March 31, outlined further reorganization plans and is forecasting another loss in its current fiscal year.

Sony said today it will close four more plants worldwide, including an LCD TV plant in Mexico, among other cost-cutting measures.

The global economic downturn and exchange rates between the yen and foreign currencies took their toll on Sony across the board, with either lower sales or poor performances in electronics, Sony Ericsson, games and other Sony business segments.

Sales and operating revenue for the year was $78.9 billion, down 12.9 percent compared with the prior year, and its operating loss was $2.3 billion (227.8 billion yen) compared with an operating profit in the prior year of 475.3 billion yen.

By segment, in electronics, sales and operating revenue were $55.9 billion, down 17 percent, with an operating loss of $1.72 billion (168.1 billion yen) compared with 441.8 billion yen in operating income during the prior year.

Bravia LCD TVs had higher unit sales, but sales were down for Handycam video cameras, Cyber-shot digital cameras and Vaio PCs, and lower prices due to increased competition hit all of those categories.

Sony Ericsson reported sales and operating revenue were down in euros by 19 percent to 10.3 billion euros, compared with profits of 993 million euros in the previous year. Sony blamed “less than favorable product mix, price pressure” and lower unit sales as the reasons for the performance.

In its game segment, sales were down 18 percent to $10.75 billion with an operating loss of $597 million (58.5 billion yen) compared with the prior year’s 124.5 billion yen. Lower PlayStation2 hardware and software sales were the culprits here, with the yen appreciating against the U.S. dollar and euro causing problems.

The additional four plants being closed by Sony includes its Baja California Mexicali factory, which is involved in LCD TV manufacturing, that will shut down in September. Previously it had announced the closing of four other plants.

As previously announced, Sony has met its target of eliminating 16,000 jobs and is forecasting a cut of 300 billion yen more in costs this fiscal year with 80 percent in electronics.

In TVs, Sony is predicting it will ship 15 million units during this fiscal year, the same as the prior fiscal year, but executives on a conference call today explained it will focus more on larger-sized TVs and ones that are more eco-friendly. Costs of production should be cut due to greater centralized planning and improved efficiency.

In the fourth quarter, ended March 31, sales were $15.6 billion, 22 percent lower than the same quarter in the prior year. Net loss for the quarter was $1.7 billion (165.1 billion yen), compared with net income of 29 billion yen in the prior year’s fourth quarter.

Sony is forecasting 6 percent lower sales and revenue for this fiscal year, to 7,730 billion yen, and a net loss of 120 billion yen, compared with this year’s net loss of 98.9 billion yen. If Sony does post a net loss for this fiscal year, it will be the first time it has ever recorded back-to-back annual losses.