Struggling Sony Looking For Cash Billions In Losses Tipped

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Cash strapped Sony is today expected to announce billions in losses, after admitting that despite having hundreds of products for sale, very few are generating profits including their high profile Playstation’s and Bravia LCD TV’s.

This week the company called on banks to give them a helping hand as it attempts to refinance their operation. In comparison Nintendo with two key products including the Nintendo Wii and the handheld DSi along with a handful of software titles are making billions at the expense of Sony.

The company that long dominated the field of consumer electronics, from the first pocket transistor radio to the Walkman and the PlayStation, is in trouble. Almost every product line is unprofitable. Sony expects to lose nearly $3 billion when it reports its 2008/2009 results today.

“What this recession has done is expose the weaknesses in our system that we didn’t want really to admit,” Sony boss Sir Howard Stringer whose job is now well and truly on the line told the UK Economist.

The Economist also wrote recently, Sony’s music-player business has been crushed by Apple’s iPod and iPhone, and its mobile-phone unit, Sony Ericsson, has suffered as the handset market has polarised between cheap models and advanced “smart” phones. Sony is the world’s second-largest LCD television-maker, but for five years has made a loss on every set it has sold. Also bleeding billions in losses is the Sony Playstation which is proving less popular than the Nintendo Wii and the Microsoft Xbox 360 both of which are outselling the Playstation PS3 in most markets around the world.

Also hurting Sony with their iPod and iPhone is Apple who combined with Nintendo will deliver over $5B in profits from 4 products and a range of portable software, content and applications.  

 

Last night Sony said that they will sell $1.3 billion dollars worth of five and ten year bonds to help the company refinance maturing debt, according to a banker involved in the deal.

According to Bloomberg, the money raised will be used for “bond redemptions in 2010 as well as for daily business operations and investment,” Mami Imada, a Sony spokeswoman said.

If things don’t pick up for the struggling consumer electronics company, Sony will struggle to refinance an additional 144.9 billion yen in bonds coming due in 2010.

Late last year, Sony sold 10.7 billion yen of 1.403 percent five-year bonds as part of a December deal that were priced to yield 60 basis points more than similar-maturity government bonds. The spread widened to 61.7 basis points on Jan. 27 and has since narrowed to 52 basis points, Bloomberg data shows.

One of Sony’s biggest marketing investments right now is in spin doctor PR specialists. In Australia, the company has four in-house PR staff as well as an in-house PR Manager at Sony Computer Entertainment. They also employ several external PR consultants to work on their business. 

 

Recently when SmartHouse and ChannelNews started highlighting Sony’s global problems and after requesting an interview with Carl Rose the CEO of Sony Australia, who in one day sacked 32 people with a 96 word email to selected journalists, we were instantly cut off from any Sony communication.

The move that was orchestrated by the head of Sony Communications, Jenny Geddes, and came after she demanded that we remove a story about the kidnapping of the CEO of Sony France, along with the head of Sony Human Resources following similar Sony sackings in Europe. The ChannelNews story at the time said that Sony was tightening up security in Australia.

Screaming down the phone Geddes demanded that the story be removed. At the time she said “The issue is irrelevant to Australia”.

Sony’s results are expected later today.

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