Sony says virus disruptions may hit profit1 min read . Updated: 27 Mar 2020, 06:55 PM IST
- Sony joins a growing list of corporations forced to revise or scrap financial forecasts because of the virus
- Apple Inc., Expedia Group Inc., and Twitter Inc. are among the technology companies that have withdrawn or modified guidance in the wake of the pandemic
Sony Corp. said fallout from the coronavirus may wipe out a previously projected increase in its profit and force it to delay an earnings report scheduled for April.
The Japanese company said two factories in China are returning to normal operation but continue to face component shortages, while facilities in Malaysia and U.K. will remain shut until middle of April because of government requests. Sony said it can’t dispatch employees to these locations to discuss assembly of new products.
Sony had raised its forecast on Feb. 4, saying operating income will probably reach 880 billion yen ($8.1 billion) in the year ending March 31, compared with the 840 billion yen forecast in October. If profit comes in at the earlier figure, that would be a shortfall of about $370 million.
“Given their high exposure to consumer spending, it is not surprising that COVID-19 is having an adverse impact on their business," said Damian Thong, an analyst with Macquarie Capital.
Sony joins a growing list of corporations forced to revise or scrap financial forecasts because of the virus.
Apple Inc., Expedia Group Inc., and Twitter Inc. are among the technology companies that have withdrawn or modified guidance in the wake of the pandemic, which has disrupted supply chains, upended demand and forced millions of people to work from home. On Thursday, Dell Technologies Inc. and VMWare Inc. became the latest to withdraw their earnings outlooks.
Sony had been benefiting from strong demand for the image sensors that power smartphone cameras, but production and sales of such devices have taken a hit in recent weeks. It supplies Apple and Samsung Electronics Co., among others.
A Sony spokeswoman said it doesn’t see any notable impact on the launch of its next-generation game console PlayStation 5 planned at the end of this year.
Sony shares have slid about 10% this year.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.