Sony is still a CE basket case with the Company set to report yet another loss as consumers desert the brand.
Hopes of the Japanese Company ever regaining their brand equity are evaporating with the Company who recently slashed 50 jobs in Australia with more set to go this year admitting that they are facing a bigger loss for the just-ended business year than previously expected.
The Company which has exited the PC market and is facing declines in the AV and TV businesses has cut its operating profit outlook by two-thirds due to the costs of getting out of the money-losing personal computer business.
According to the Wall Street Journal analysts are claiming that Sony’s third outlook cut in six months could drive away even the loyalists still believing in its promise to turn around its flagging consumer electronics business. The grim forecast also stands out from Japanese rivals in the electronics industry such as Panasonic and Fujitsu which are returning to profit after withdrawing from unprofitable business areas.
“It is another major letdown” Tomoichiro Kubota, a senior market analyst at online brokerage Matsui Securities told the WSJ. “The contrast is stark with Sony anticipating a bigger loss while other companies are starting to enjoy the fruits of their restructuring measures,” he said.
Sony attributed the guidance cut to about ?30 billion in extra costs to dispose of its personal computer business, and to impairment charges from weaker overseas demand for Blu-ray discs and DVDs.
In February, the company said it expects a $1.1 billion loss to fix its loss-making PC and television businesses. Now, it expects a ?Y130 billion loss for the year ended in March, even as it raised its revenue target by a slender 0.9%. As part of its restructuring measures, it earlier announced a cut of 5,000 jobs, the sale of its PC business and the split-off of its TV division into a separate subsidiary.
Sony also slashed its full-year operating profit forecast to ?26 billion from Y80 billion, far below a forecast of ?78.82 billion in a poll of 17 analysts by financial data provider Quick. It expects to book a ?25 billion write-off related to its overseas disc manufacturing business.
Chief Executive Kazuo Hirai has said the company will focus on games, mobile devices and image sensors for future growth. But investors and analysts have been skeptical whether Sony can once again thrive as it did when hit products like Walkman portable music players and Trinitron TVs were in their heyday.
Sony recently said it would explore new growth areas and venture into the real-estate brokerage business-news that tipped its shares into a 3% slide as investors worried the company was straying further from its roots as an electronics maker.
Sony plans to announce fourth-quarter earnings on May 14, and is expected to hold a business strategy briefing later this month.