PC sale leads Sony to $1.25B loss, more gloom expected
PS4 sales overshadowed by massive marketing costs
IDG News Service - Sony's move to abandon PCs has contributed to a massive net loss of AY=128.4 billion (US$1.25 billion) for the year to March 31, and it has forecast a loss of AY=50 billion for the coming 12 months.
A year earlier, Sony made a profit of around AY=41 billion, its first in many years. Its latest plunge into the red is slightly less deep than it forecast two weeks ago.
The company reported revenue of AY=7.77 trillion for the period, up 14 percent on a year earlier.
Earlier this month, Sony revised downward its forecast net loss for the year to AY=130 billion, blaming costs related to its exit from the PC business as well as impairment charges related to its overseas disc manufacturing. It slashed its operating profit estimate by nearly 70 percent to AY=26 billion.
The PC business contributed AY=91.7 billion in operating losses. Of that, AY=58.3 billion was related to Sony's decision to sell its PC activities.
Sales and operating revenue in the segment were up nearly 30 percent to AY=1.63 trillion thanks to stronger phone sales and favorable foreign-exchange rates. But the segment still suffered a AY=75 billion operating loss, compared to AY=97 billion a year earlier.
The strong sales that Sony has seen with its hit PlayStation 4 gaming console, launched in November in some markets, were overshadowed by enormous marketing expenses. Sales and operating revenue in the Game segment jumped nearly 40 percent to AY=979 billion, but the segment booked an operating loss of AY=8.1 billion, down from an operating profit of AY=1.7 billion a year earlier.
Sony blamed the loss on costs related to the PS4 launch as well as a AY=6.2 billion write-off of some PC game titles sold by Sony Online Entertainment.
"The PS3 platform declined faster than our expectations," Sony CFO Kenichiro Yoshida told a news conference in Tokyo, "but for a year where we launched the new platform, I think we got off to a good start."
The Home Entertainment & Sound segment, which includes TVs, saw losses shrink to AY=25.5 billion from AY=84.3 billion a year earlier. TV sales were up nearly 30 percent to AY=754 billion, Sony said, citing an improvement in its LCD TV mix that reflects the launch of high-end models.
In February, Sony announced it would sell its struggling PC business to a Japanese investment firm, Japan Industrial Partners, sounding the death knell for the upmarket Vaio brand.
Sony said that 5,000 jobs would be cut as part of the restructuring, including some 1,500 positions in Japan and 3,500 overseas by the end of March 2015.
For the coming year, Sony sees its mobile and game segments posting double-digit growth in sales and operating revenue, but that will be damped by poor results overall.
"Consolidated sales for the fiscal year ending March 31, 2015 are expected to be essentially flat due to an increase in sales in the electronics businesses being offset by an expected decrease in PC sales included in All Other elated to Sony's withdrawal from the PC business," the company said.
CEO Kazuo Hirai, who took the helm in 2012, has pledged that games would revive Sony's fortunes. He also promised to make its long-suffering TV business profitable.
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