Sony posts $2-billion loss, 17% drop in sales
Battered by a strong yen and floods in Thailand that hobbled several of its factories, Sony Corp. reported a $2-billion loss and a sharp decline in sales for its end-of-year quarter.
The Tokyo technology and entertainment giant Thursday said sales slid 17.4% to $23.4 billion in its third quarter ended Dec. 31. Its $2-billion net loss compared with a $950 million gain the same period a year earlier.
The bulk of the losses stemmed from Sony's core consumer electronics business, where it was forced to cut the prices of its LCD television sets below production cost to compete with lower-cost rivals. Compounding the problem was a the high yen, which made its products more expensive outside of Japan.
Sony's PlayStation business also contributed to the decline. The unit racked up higher marketing costs in the quarter, with expenses to promote its PlayStation Network online entertainment services, while revenue suffered from a price reduction of its PlayStation 3 game console.
Kazuo Hirai, Sony's newly appointed chief executive, last year said fixing its LCD television business would be the company's No. 1 priority this year.
Sony's film business exhibited a bright spot in an otherwise gloomy financial picture. Revenue from Sony Pictures Entertainment posted a 7.7% increase in revenue to $2.1 billion, ending the quarter with a $9-million profit. Sony attributed the gains to a higher number of box office releases in the quarter, which helped offset a decline in DVD and other home entertainment revenue.
Sony's music business saw both revenue and operating income decline, but remained profitable -- bolstered by continuing strong sales of Adele's "21" album as well as music from the "Glee" TV show. The group's sales fell 11.7% to $1.6 billion, while profits of $196 million were down 21.7% from a year earlier.
Sony also revised its forecast for its full fiscal year, saying the deteriorating economies in Europe and elsewhere will result in lower demand for its products. Sales for the year ending March 31 is now expected to be $83.1 billion, down 1.5% from its November forecast and down 10% from a year earlier.
-- Alex Pham
Photo: Kazuo Hirai, Sony's new chief executive, at the 2012 Consumer Electronics Show in Las Vegas. Credit: Ethan Miller / Getty Images