Sony stock is down 20% and profits have fallen 8.6% as the Japanese company struggles to sell their Bravia TVs and Cameras to brand conscious consumers, who are now turning to other brands such as Panasonic and Samsung.
On the bright side, sales of Playstation gaming consoles are up but the future looks bleak for the Japanese manufacturer.
Forced to dump the bulk of their own manufacturing operations, Sony said that their net profit in the October to December period was down 8.6% due in part to heavy discounting which has been rampant in Australia and is now having a major impact on the company’s bottom line.
Profit for the quarter was $885.7 million for the third Japanese quarter while revenue slipped 1.7%. In comparison Panasonic reported a 24% jump in profits and Sharp a 9.5 rise in profits.
“We are looking at the fourth quarter conservatively,” said Sony Chief Financial Officer Masaru Kato at a news conference. “The LCD television business will be as tough as ever.”
Sony said conditions in its flat-screen television segment remain tough as falling prices squeeze margins.
Sony, which competes with Samsung Electronics and LG Electronics in televisions and Panasonic, Canon and Nikon in digital cameras, has been struggling to keep pace with rivals in terms of profits or products.
Since CEO Howard Stringer took the helm in 2005, the company’s share price has fallen by a quarter and Sony has failed to replicate its early successes with the likes of the Walkman and PlayStation game console.
Sony said their television business where the company is still pushing 3D TV posted big losses with the company admitting that they have never made a profit selling their Bravia TVs.
The Japanese company said that they expect another loss in the current quarter because it is holding more inventory than it had previously forecast.
One bright spot for the company has been their Vaio notebooks and PlayStations where profits almost doubled.
The company admits that they are still looking for an innovative spark to reinvigorate growth and are hoping that their recently launched next-generation portable game system will deliver positive sales despite the fact that they are cutting retailers out from being able to sell software for the new handheld device.