Sony posts quarterly loss on firmer yen, weak TV sales

Sony posts quarterly loss on firmer yen, weak TV sales
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First Published: Thu, Jul 30 2009. 12 16 PM IST
Updated: Thu, Jul 30 2009. 12 16 PM IST
Tokyo: Sony Corp posted a smaller-than-expected quarterly loss, helped by an improvement in its struggling flat TV business, and said it was aiming to beat its official forecast and at least break even for the full year.
Sony has fallen behind Apple Inc’s iPod in portable music, Nintendo Co in videogames, and is struggling to compete with Samsung Electronics Co Ltd in LCD TVs.
But the company, which vies with Panasonic Corp for the position of the world’s largest consumer electronics maker, said that losses on flat TVs had narrowed in the latest quarter, bringing the business close to the break even level.
The maker of Bravia flat TVs and Vaio PCs kept its operating loss forecast of ¥110 billion ($1.2 billion) for the year to 31 March 2010.
That is about half the ¥227.8 billion loss it racked up a year ago, and compares with the consensus of ¥117.7 billion loss according to a Reuters poll of 19 analysts.
But Sony said it was aiming to beat that.
“We are keeping our official forecast but internally we are aiming to at least break even,” Sony chief financial officer Nobuyuki Oneda told a news conference.
With three quarters of its revenues earned overseas, Sony is vulnerable to the yen’s appreciation, which makes Japanese exports less price competitive overseas at a time South Korean rivals are benefiting from a softer won.
Sony’s operating loss came in at ¥25.7 billion in April-June, down from a profit of ¥73.44 billion a year earlier, and smaller than the average ¥103.1 billion loss forecast by five analysts.
It reported a net loss of ¥37.1 billion, a reversal from a ¥34.98 billion profit a year ago.
In contrast, South Korea’s LG Electronics Inc posted a record quarterly profit on strong TV and mobile phone sales, while Samsung beat market expectations with a 5% rise in quarterly net profit.
Sony has been restructuring its sprawling operations. It has announced plans to close eight manufacturing sites, cut 16,000 jobs and halve its 2,500 suppliers.
“Sony is making changes to adapt to the environment but it still seems to be having trouble keeping up and perhaps should have been a bit more aggressive about cost-cutting,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
Ahead of the results, Sony’s shares closed up 6.8% at ¥2,505, outperforming a 1.9% rise in the Tokyo stock market’s electrical machinery index. The stock has gained 17% since April through Wednesday, while the subindex put on 29%.
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First Published: Thu, Jul 30 2009. 12 16 PM IST
More Topics: Company Results | Sony | Samsung | Nintendo | Sony Vaio |