Sony Posts $1.26 Billion Loss For Year

Tokyo — The red ink continued to flow at Sony as the struggling electronics giant posted a hefty $1.26 billion net loss for its fiscal year, ending in March, and a weak fourth quarter.
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Tokyo — The red ink continued to flow at Sony as the struggling electronics giant posted a hefty $1.26 billion net loss for its fiscal year, ending in March, and a weak fourth quarter.

The company attributed much of the loss to costs — almost $900 million — related to the departure from its Vaio PC business and continued restructuring.

Overall sales rose 14.3 percent year on year, the company said, primarily due to the successful launch of the PlayStation 4, a significant increase in smartphone sales, and the favorable impact of foreign exchange rates on the weakened yen.

Operating income dropped $257 million year on year, also attributed to restructuring costs of the Vaio business as well as impairment charges in the company's battery and disc manufacturing businesses.

The weak results come a day after Sony announced it would not pay out bonuses to its senior executives for a third straight year.

In the company's mobile products and communications unit, sales were up 29.6 percent year on year, to $15.8 billion, but the division took an operating loss of $729 million due to the loss of PC unit sales. The loss was partially offset by increases in smartphone sales and average selling prices, the company said.

Sony's home entertainment and sound division reported a loss of $248 million for the year, an improvement over last year's $577 million loss, while sales rose 17.5 percent. The sales increase was attributed to favorable foreign exchange rates along with an adjustment to the company's LCD TV product mix to introduce more higher-priced value-added models. TV sales increased 29.7 percent year on year to $7.3 billion, but the TV business showed a loss of $250 million, down from last year's loss of $683 million. The operating loss in the TV business excludes restructuring charges, Sony said.

Sony's gaming business saw the launch of the PS4 drive sales up 38.5 percent for the year to $9.5 billion, but the unit reported an operating loss of $78 million due to the costs of the launch as well as a $60 million write-off of certain PC game software titles sold by Sony Online Entertainment.

Last month, Sony reported initial sales of 7 million PS4 consoles worldwide since its launch late last year.

The company's imaging products and solutions business, which includes both consumer still and video cameras as well as broadcast and professional products, saw sales dip 2 percent to $7.2 billion, primarily due to a significant decrease in sales of compact digital cameras and video cameras, reflecting a contraction of those markets, Sony said. The unit showed a huge growth in profit year over year, from less than $1 million to $256 million, but the company pointed out that due to the division's restructuring, sales figures, operating revenue and operating income reporting for the last fiscal year have been reclassified.

For the fiscal fourth quarter, Sony's net loss was $1.342 billion, compared with a net profit of $915 million in the same quarter last year. Sales for the quarter, ended March 31, increased 8.1 percent year on year to $18.164 billion. Sony said the increase was primarily due to the favorable exchange rates, the launch of the PS4 and a significant increase in sales in the company's motion picture segment.

In offering guidance for the current fiscal year, Sony said it expects unit sales to be essentially flat, but forecast significant growth in operating income as efficiencies from the company’s restructuring begin to kick in. The company still forecast a loss of almost $500 million.

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