Sony expects $3.2 billion annual loss
Sony Corp. Chief Financial Officer Masaru Kato reacts during a press conference in Tokyo, Monday, May 23, 2011. (AP Photo/Koji Sasahara)
The Associated Press
Published Monday, May 23, 2011 7:13AM EDT
TOKYO - Sony Corp. is expecting an annual loss of US$3.2 billion, reversing its earlier projection of a return to profit, as the electronics giant struggles with production disruptions from Japan's tsunami and a hacker attack on its online gaming service.
The Japanese maker of PlayStation 3 video game machines and Bravia flat-panel TVs said Monday that the projection of a net loss of 260 billion yen ($3.2 billion) for the fiscal year ended March 2011 was largely due to writing off 360 billion yen ($4.4 billion) related to a tax credit booked in the fourth quarter.
Sony's official earnings report is expected Thursday. The company had earlier projected a 70 billion yen ($860 million) profit.
Like many other Japanese manufacturers, Sony has been hampered by the production disruptions set off by the March 11 earthquake and tsunami that killed more than 25,000 people, destroyed many factories and sent the nation's economic recovery into reverse.
The company kept its operating profit forecast unchanged at 200 billion yen ($2.46 billion). It expects to report sales of 7.18 trillion yen ($88.2 billion), slightly down from an earlier projection of 7.2 trillion yen ($88.5 billion).
Tokyo-based Sony also faces a new challenge to its reputation following a massive security breach affecting more than 100 million online accounts.
After temporarily closing down its online gaming services last month, Sony began restoring its PalyStation Network services in the U.S. and Europe on May 15 mainly for online gaming, chat and music streaming services.
Sony has seen plunging sales of flat-panel TVs and other gadgets, and was likely to remain in the red in its TV business for the seventh year straight.
Sony has also taken a beating in music players and other portable devices to Apple's iPod, iPhone and iPad.
The company booked a 40.8 billion yen ($439 million) loss for the fiscal year ended March 2010 after a 98.9 billion yen loss the year before -- Sony's first annual red ink in 14 years.