Sony reports $1 billion loss

F1nut

TOKYO -Sony Corp. reported a 98.9 billion yen ($1 billion) loss for the fiscal year ended March, its first annual net loss in 14 years, and projected it would lose even more money this year amid a serious slump in the global electronics market.
Sony also said Thursday it is closing three plants in Japan to help turn its business around.
Hit by dropping sales and the strong yen, Sony lost 165 billion yen in the January-March quarter, compared to a 29 billion yen profit for the same period the previous year.
The Japanese electronics and entertainment company said no quick recovery was in sight, projecting a 120 billion yen ($1.2 billion) loss for the fiscal year through March 2010.
The results are a reversal from the 369.4 billion yen profit Sony recorded a year earlier. Sales for the fiscal year through March slid 12.9 percent to 7.73 trillion yen, it said.
Sony, which makes Bravia flat-panel TVs and Cyber-shot digital cameras, joins a string of other big Japanese corporate names, including Toyota Motor Corp. and Hitachi Ltd., that are announcing huge losses.
Sony is closing three plants in Japan by the end of December — one for cell-phone cameras, another for video recorder parts and another for systems used for smart cards. After they are shuttered, the number of Sony's global plants will dwindle from 57 last year to 49.
By operations, Sony said it had an operating loss in its core electronics segment because of the slowing global economy, price competition and a strong yen, which erased any benefits from better liquid-crystal display TVs.
Sony also continued to lose money in its game segment, where its PlayStation 3 home console and PlayStation Portable have struggled against rival offerings from Nintendo Co., the Wii and DS, as well as in some markets against the Xbox 360 from Microsoft Corp.
The company sold 10.06 million PlayStation 3 machines for the fiscal year through March, up 10 percent from the previous year. It also sold more PlayStation Portable machines, at 14.11 million during the fiscal year, up slightly from 13.81 million.
In its movies division, home entertainment sales declined, and were not offset by some of its stronger motion picture releases, including "Hancock," Sony said.
Sales for the fiscal year fell in all key markets: down 20 percent in the U.S., 17 percent in Europe and 14 percent in Japan.
Sony said its dismal forecast reflects its expectations that "deterioration in the business environment brought on by the slowing global economy will continue." Expenses related to restructuring efforts will also add to the losses, it said.
Analysts say Sony's Chief Executive Howard Stringer, who decided to center power in his position earlier this year, has yet to give details of a turnaround plan, including strategies and products.
Stringer has promoted four relatively young executives into his managerial team, representing Sony's gaming and electronics sectors.
Sony also faces a host of rivals that make similar products, often at cheaper prices, such as Samsung Electronics Co. of South Korea, as well as manufacturers from Taiwan, China and other nations, such as Acer Inc. and Lenovo Group Inc.
Sony said Thursday it was on track with its previously announced plan to reduce 8,000 of its 185,000 jobs around the world, and trim another 8,000 temporary workers who aren't included in the global work force tally.

If they had continued to fully support SACD software they wouldn't have lost as much money. Idiots!

dorokusai

SACD was deemed worthless a long time ago by Sony....it had very little to do with this outcome.

dorokusai

Really? That's a groundbreaking revelation. They gave up, consumers are borderline retarded anyways....lose/lose. The market is much smaller than SACD fans think...sorry. Sony hasn't done much right but they know where the money is.

ben62670

You can't play an SACD on an I-pod, you can't copy them, most people setup HTIB with all the speakers lined up in a row like ducks, and the downloads would be painful if you could copy them. Cd's sales are going downhill. SACD is pretty much dead in the water minus a few of us. Most people can't tell the difference between an MP3 and a CD. With all the stores taking a hit HT/stereo wise I doubt that Sony is the only one taking a hit. We can only hope that BR can take hold of HiFi capabilities.
Ben

ND13

Isn't this DeJa Vu?

Ricardo

I don't see how supporting SACD would offset much of that loss. I'm pretty sure the market for SACD is limited to Club Polk members and a couple more out there.

George Grand

There's two guys at AK that talk about them SOMETIMES. Add them in.

Ricardo

Isn't Jesse one of those two? Let's make sure we don't double count.

Face

I blame the DAT cassette.

venomclan

Supporting SACD would not have made a bit of difference on the bottom line. There was never any mass appeal, and thus no market.

shack

It could be much worse....

HITACHI, the conglomerate that makes everything from whitegoods to electrical generators, has declared a ¥787.3 billion ($10.6 billion) net loss, the deepest of the current Japanese annual earnings season.

The Tokyo-based multinational's result for the year to March 31 is the second-worst ever, according to Shinko Research Institute, after telecoms giant NTT Group (then Nippon Telegraph & Telephone).

In keeping with the continuing grim outlook for Japan's international manufacturers, Hitachi is projecting a ¥270 billion net loss for the current year -- its fourth annual in succession.

WilliamM2

Yamaha, D&M holdings, Pioneer, Panasonic, JVC, are all reporting losses, as I'm sure most other CE companies are. Not a good time to be in the CE business. Hopefully we don't lose too many before it shakes out.

dkg999

Never waste a good recession! It would be interesting to really analyze their public reporting to see how many one-time charges, etc. they are adding into the lose. If you're going to show a lose anyway, a company might as well get everything they can off the books.

dpowell

They put too much money into Blu Ray.

disneyjoe7

Do I hear BailOut?

sucks2beme

There might not be much left by year's end. We may be left with nothing but
Chinese stuff. Who's got the cash to bail out even a fraction of these guys?

cfrizz

This might have worked if they had used the SACD to replace cd's the way cd's replaced vinyl & tapes & priced them at cd prices, then maybe it might have worked, but I doubt it.

Keiko wrote: »

I disagree. If SACD were marketed more aggressively and people educated to it's potential. I believe Sony could have been better off. Instead, they chose to abandon consumers and possible revenue.

Knucklehead

[IMG]<a href="http://s557.photobucket.com/albums/ss15/dl3cs/?action=view&current=polk.jpg&quot; target="_blank"><img src="http://i557.photobucket.com/albums/ss15/dl3cs/polk.jpg&quot; border="0" alt="Photobucket"></a>[/IMG]a sign of the times?

dpowell

Where'd you get that pic?!

Airplay355

Looks photochopped to me

timlitton

There wasn't enough of a perceived benefit to the general public to entice them into replacing a CD player that sounds "good enough" to most. SACD's only reap a tangible benefit after spending another few hundred (or thousand) dollars upgrading speakers and receivers.

The boombox buying public saw an immediate and substantial benefit from CD over hissy tapes they had to rewind and fast forward. The same was true with VHS to DVD.

It's also the same reason a lot of CP members still haven't jumped from DVD to bluray.

Sony is losing billions.The $36.88 they would have reaped from SACD customers last year wouldn't have helped a lot. (Even if SACD's are pretty cool)

BlueFox

All the CD manufacturers should have released new CDs as hybrids. This would have helped SACD succeed.

Sony's problem, aside from the recession, is they lost the founder, who was an engineer, and insured the company made good products for both average and audiophile customers. Once the MBAs took over running the company, it has been on an accelerating downhill path to mediocrity

SolidSqual

F1nut wrote: »

If they had continued to fully support SACD software they wouldn't have lost as much money. Idiots!

I hope you are joking. Not sure if this metaphor will work on you but some will understand. If only Sega had supported the Dreamcast, they wouldn't have approached bankruptcy.

Knucklehead

dpowell wrote: »

Where'd you get that pic?!

Churchsigngenerator.com

BIZILL

markets are down. consumer spending is down. sony is down.

cnh

In the last 10 years or so Sony has had its head up its A$$...it let competitors take it on in the Video market and still kept its prices too high--the days of the Trinitron dynasty are OVER boys! And SACDs, yeah great but Doro's right....no profit, no real consumer market at large for that.

I have a PS3 but I didn't get mine until I was able to get it well below MSRP at a CC closeout. 399 is still a bit high though I know those units are selling at a loss even at that price! Got mine for 250. There's a good price for you!

cnh

engtaz

Yes but the won the High Def battle by out spending Toshiba for Movie Studios.

DanAckerman

If you want a PS3 start watching as once they are gone, they will be gone. Sony was rumored to be dumping the line a few months ago as they couldn't afford to keep selling them. With this announcement, I expect it is just a matter of time.

And I have to say I think this has a lot more to do with the downturn and PS3 sales than SACDs.

F1nut

cfrizz wrote: »

This might have worked if they had used the SACD to replace cd's the way cd's replaced vinyl & tapes & priced them at cd prices, then maybe it might have worked, but I doubt it.

Actually, that was Sony's original plan. Their entire catalog was going to be released on hybrid SACD only. Every other record company would have followed suit and there would be a lot of happy audiophiles today.

Some should note that I said Sony might not have lost AS much money, not that SACD alone was going to keep them in the black.

BlueFox wrote:

All the CD manufacturers should have released new CDs as hybrids. This would have helped SACD succeed.

Sony's problem, aside from the recession, is they lost the founder, who was an engineer, and insured the company made good products for both average and audiophile customers. Once the MBAs took over running the company, it has been on an accelerating downhill path to mediocrity

Ding, ding, ding! We have a winner.

jon s

the funny thing is that after announcing the loss, Sony stock value went up 5% because the loss was less than expected.... go figure...

Toxis

ben62670 wrote: »

You can't play an SACD on an I-pod, you can't copy them, most people setup HTIB with all the speakers lined up in a row like ducks, and the downloads would be painful if you could copy them. Cd's sales are going downhill. SACD is pretty much dead in the water minus a few of us. Most people can't tell the difference between an MP3 and a CD. With all the stores taking a hit HT/stereo wise I doubt that Sony is the only one taking a hit. We can only hope that BR can take hold of HiFi capabilities.
Ben

Finally someone gets it. It was almost the exact wording I was going to use. SACD is an amazing format and while I love it and listen to it 80% of the time over CD's, it's just not a mass market product. Period! Anyone who doesn't agree with that statement is in complete denial of the industry. There's more of a market for vinyl than SACD and look how dwindling vinyl sales have been. People want cheap speakers, even cheaper price tags and iPod connectivity. Speaker placement is rare enough these days that I'm just happy when I talk to someone and they understand they need two speakers behind them; one on each side. Most people want surround sound but hate the idea of rears. "So what part of surround do you want then?" I show them a simulated surround sound setup and they can't hear enough sound behind them. It's an uphill battle that ends with someone settling. Face it guys, now days 90% of the people who buy any sort of audio (HTiB, clock radio, tower speakers, whatever...), they're just happy to hear sound. The fact it sounds like the singer has a severe head cold and a sore throat while singing through a piece of PVC at the end of a very long hallway doesn't matter to them. It's still the same song.