Tokyo - Sony reported a net loss and a double-digit percent decrease in sales during its fiscal third quarter due to the Thailand floods, exchange rates and TV sales and price declines.
Net loss attributable to Sony's stockholders (excluding net income attributable to non-controlling interests) was 159 billion yen ($2.038 billion) in the quarter ended Dec. 31, 2011, compared year-on-year to net income of 72.3 billion yen in the same quarter of the previous fiscal year.
Sales were 1,822.9 billion yen ($23.4 billion), a decrease of 17.4 percent compared to the same quarter of the previous fiscal year.
Sony blamed the impact of the floods in Thailand, which began in October 2011, deterioration in market conditions in developed countries, and unfavorable foreign exchange rates.
An operating loss
of 91.7 billion yen ($1.176 billion U.S. dollars) was recorded, compared with operating income of 137.5 billion yen in the same quarter of the previous fiscal year. This was primarily due to a significant deterioration in equity in net income (loss) of affiliated companies, deterioration in the cost of sales ratio, and a decrease in gross profit from significantly lower sales, Sony said.
In its consumer products and services (CPS) segment, sales decreased 24.4 percent year on year to 996.5 billion yen ($12.8 billion). Sales to outside customers decreased 25.3 percent year-on-year. This was primarily due to a decrease in LCD TV sales reflecting price declines from deteriorating market conditions in Japan, Europe and North America, the impact from the Thailand floods, and unfavorable exchange rates, the company said.
An operating loss of 85.7 billion yen ($1.09 billion U.S. dollars) was recorded, compared with operating income of 63.5 billion yen in the same quarter of the previous fiscal year. This was primarily due to deterioration in equity in net income (loss) of affiliated companies, as well as a decrease in gross profit due to lower sales and deterioration in the cost of sales ratio, partially offset by a decrease in selling, general and administrative expenses, the company said.
For the quarter, Sony recorded an impairment loss of 63.4 billion yen ($813 million) as it sold off its shares of S-LCD to Samsung Electronics, resulting in restructuring costs of 1billion yen ($13 million).
Categories contributing to the deterioration in operating results -- excluding the restructuring charges and impairment loss -- include LCD televisions, reflecting a decline in unit selling prices that exceeded cost and expense reductions, and the game business, reflecting higher marketing costs to promote network service platforms and lower sales of PlayStation3 hardware due to a strategic price reduction.
The financial condition of Sony only illustrates the daunting challenge facing incoming president/CEO
, whose promotion from his post of executive deputy president was announced yesterday and will take effect on April 1. Howard Stringer will remain as chairman.
In its forecast for its fiscal year ending March 31, sales are predicted to be 6,400 billion yen, down from November's forecast by 1.5 percent and down 10.9 percent from the prior year's actual results.
The net loss predicted is now 220 billion yen, higher than November's prediction of 90 billion yen and closer to actual loss of 259.6 billion yen from the prior fiscal year.