Sony Records Second Loss, Sees Profits Ahead
Sony recorded its second straight year of losses last year as sales fell 6.7 percent, but the company expects to return to profitability this year, it said Thursday.
The company reported a net loss for the financial year from April 2009 to March 2010 was
At the operating level, which measures profitability in Sony's core business areas and excludes taxes and exceptional and one-off items, the company managed to achieve a profit of
Sales of consumer products and devices, including its flagship Bravia LCD TVs, Handycam video cameras and Cybershot digital cameras, dropped 19.9 percent on a monetary base. Fierce competition pushed down prices so less money was made -- something that's good for consumers but made for manufacturers like Sony.
While unit shipments of cameras dropped Sony sold 15.6 million Bravia TVs, beating its target of 15 million units.
Sony's networked products and services unit registered a 10.2 percent drop in sales, primarily due to lower revenues from PlayStation Portable (PSP) handhelds and Vaio PCs.
The PSP has been struggling and unit sales last year were 9.9 million, slightly below the company's target and well below the 14.1 million units sold in the prior year. Unit sales of PlayStation 3 consoles increased to 13 million, up from 10.1 million in the year earlier.
Both the consumer products and networked products businesses recorded operating losses for the year but each was not as bad as the prior year.
Sony's non-electronics divisions reported better results.
Revenue at Sony's Pictures unit was helped by "2012," "Angels and Demons," and "Michael Jackson's This Is It," while sales of Michael Jackson CDs and music helped Sony's music arm. Sony Life, the company's insurance subsidiary, recorded a 72 percent jump in revenue thanks to gains from investments and the rising Japanese stock market.
For the current year, Sony expects to achieve a net profit of
The figures and forecast double as a report card for a company-wide reorganization that took place a year ago. It saw Howard Stringer take the title of president in addition to his role as chairman and assume direct control of the company's key electronics business. Stringer also installed a new executive team consisting of executives with whom he already had strong links.
The reorganization saw Sony's product-based business units rationalized and streamlined. Common areas, such as advertising, were brought together into units that worked company-wide and Stringer also embarked on a restructuring plan that would see unprofitable businesses closed and factories shut-down.
At the end of the year Sony had managed to achieve cost reductions beyond the targeted
Martyn Williams is in Tokyo and can be reached by e-mail at firstname.lastname@example.org and on Twitter @martyn_williams