Sony turnaround hits some bumps
The Japanese electronics maker booked a large loss in its first quarter
By Jay Alabaster | IDG News Service | Published 08:00, 02 August 12
Sony's big recovery showed signs of faltering on Thursday as the company recorded a ¥24.6 billion yen (£0.20 billion) quarterly loss and slashed its yearly profit forecast by a third.
The update comes less than three months after announcing its largest annual loss ever but promising a quick turnaround.
Sony's loss during its April-June quarter was 60 percent worse than last year, when it was struggling with the after-effects of a devastating earthquake and tsunami that struck in March.
The company said it booked a large loss in its mobile phone division, due in part to the struggles of the former Sony Ericsson mobile joint venture, which it made into a subsidiary in February.
Sony's game division also fell to a loss during the period, as sales of its older PlayStation Portable and PlayStation dropped. Sales of the newer PlayStation Vita increased, but newer game consoles are often sold at a loss or near break-even levels, compared to robust margins on more mature hardware. Its movie business also sank into the red during the quarter.
The technology company also cut its annual profit target to ¥20 billion yen from the ¥30 billion yen it forecast in May, saying it now expects sales to be 8 percent lower than it perviously thought.
The decreasing expectations evoke memories of last year, when Sony originally said it would make a healthy profit, then slashed its target every three months as it was beset by falling sales amid natural disasters and a hacking scandal, eventually booking the biggest loss since it was founded in 1946.
The latest April-to-June stretch was Sony's first under new CEO Kazuo Hirai, who previously ran its consumer electronics and PlayStation gaming operations. Hirai has sworn to turn Sony around by refocusing on the sleek gadgets that made it famous.
The company once served as the role model for the rivals it is now chasing - recent court documents submitted in a US patent lawsuit between Apple and Samsung show that part of the design process for the iPhone involved creating "Sony-like" mockups to work from.
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