Sony Targets Return to Profitability After Record US$5.7 Billion Loss Last Year

Sony closed the books on its worst year ever on Thursday, while also targeting a slight profit for the current period, which would be its first since 2008.

The electronics company said it booked a net loss of ¥457 billion (US$5.7 billion) for the fiscal year through March, slightly better than a forecast it made last month, but still Sony's deepest loss since it was founded in 1946.

While a large portion of the massive loss is from tax concerns and other one-off charges, the company said overall sales slipped 10 percent to ¥6.5 trillion, with deep declines in the U.S. and Europe.

Sony's official announcement of its results for last fiscal year marks the end of its time under former CEO Howard Stringer. The charismatic former television executive ran the company for seven years, cutting jobs and closing factories to streamline operations and bring it back to profitability before it was hit by a series of obstacles including a hacking crisis, last year's massive earthquake and tsunami, and flooding in Thailand.

The Tokyo-based firm's decline, which has mirrored that of other domestic electronics makers, has come as it is eclipsed by foreign competitors like Apple and Samsung. In addition to being weighed down by its loss-making TV business, Sony has in recent years failed to come up with the hit products that fatten margins and generate buzz and loyalty among consumers.

Last year, Sony said its bottom line was hurt by falling income from many of its core products, including TVs, PCs, digital cameras and its gaming consoles. It did record continued profits in its movie and music divisions, which benefitted from cable TV shows as well as hit albums from artists like Beyonce and Pitbull.

Incoming CEO Kazuo Hirai, who officially took his new post on Wednesday, has been actively working to implement his vision for the company, which includes a focus on the core electronics that built its legacy and on online platforms that link its various product groups. Hirai outlined his vision for Sony in a Tokyo press conference last month, a plan that includes a reduction of global head count by 10,000, or about 6 percent of the total.

Sony said Thursday that for the current fiscal year through March 2013 it aims for a net profit of ¥30 billion, while increasing sales 14 percent from the latest result. It said it would look to turn around its struggling TV business with a focus on profits over unit sales, and expected a strong recovery from last year's earthquakes and Thai floods.

For the January-March quarter, Sony said losses were slightly less than a year earlier, which included the period after the March 11 earthquake and tsunami that flattened portions of Japan's northeast coast.

Like many Japanese companies, Sony's fiscal year runs from April to March.