Sony sees return to profit after third annual loss
TOKYO (AP) – Sony forecast a return to profit for this fiscal year after sinking into its third straight year of red ink, hammered by the costs of massive online security breaches and the damage from a March quake and tsunami in northeastern Japan.
Tokyo-based Sony Corp. said Thursday it expects an 80 billion yen ($975.6 million) profit for the current fiscal year, as sales recover in flat-panel TVs, games, personal computers and network services.
Sony chalked up a 259.6 billion yen ($3.2 billion) loss for the fiscal year ended March 2011, the company's biggest net loss in 16 years.
Sony's latest red ink is worse than the 40.8 billion yen loss racked up the previous year, and the 98.9 billion yen loss for the year before that.
Sony said it hopes to boost sales for the fiscal year through March 2012 by 4.4 percent to 7.5 trillion yen ($91.5 billion).
The losses recall another difficult period in Sony's history, when its bottom line was battered in 1995 by the disastrous results of its movie operations, which followed Sony's $3.4 billion purchase of Hollywood studio Columbia Pictures in 1989.
Sony, which makes the PlayStation game console and Bravia liquid-crystal display TVs, has been battling production delays and sales losses after supplier factories were damaged by the quake and tsunami.
It lowered its earnings projection earlier this week, citing a charge it must take related to damages from the disaster. It had initially expected to return to profit.
Sony also faces a new kind of challenge to its reputation after acknowledging a massive security breach affecting more than 100 million online accounts, and it was forced to close down its online gaming services last month.
Sony is expecting costs related to its online security woes of 14 billion yen ($173 million), covering customer support, freebie packages, legal costs, lower sales and measures to beef up security.
It has said it has not confirmed any misuse of the possibly stolen personal information, but more security problems have popped up in recent weeks, including services in Greece and Canada.
For the January-March quarter, Sony's red ink ballooned to 388.8 billion yen ($4.7 billion) in losses from a 56.6 billion yen loss for the same period the previous year. Quarterly sales dropped 7.8 percent to 1.58 trillion yen ($19.3 billion).
Sony has stayed in the red in its core TV business for seven years straight. A strong yen, which erodes the value of overseas sales, and a decline in prices were behind the damage, despite selling more TVs, according to Sony.
Sony stock gained 0.1 percent to 2,238 yen ($27) in Tokyo, shortly before earnings were announced.