Sony annual loss narrowed to $440 million
"Improved performance" of game division helps electronics giant save $311 million; final annual report due out Thursday.
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Though Sony won't issue its annual report until Thursday, the electronics giant today revised its earnings estimate for the 12 months ending March 31, 2010. Though the company still believes it will post a hefty ¥41 billion ($440 million) annual loss--only its second in 15 years--the shortfall was much less than the ¥70 billion ($752 million) it had predicted in February. During the prior fiscal year, the company lost ¥98.9 billion ($1.06 billion).
Why the drastic revision? Sony said that earnings from its Networked Products & Services division, which contains Sony Computer Entertainment, will surpass previous estimates by ¥10 billion ($107 million). The better-than-expected earnings were "due to improved performance within the game business" and streamlined VAIO computer manufacturing, according to the company.
Reduced costs in manufacturing LCD televisions also improved Sony's bottom line, as did lower-than-anticipated price declines of the devices. However, the ¥30 billion ($322 million) savings were all but wiped out by a ¥27 billion ($290 million) "LCD television asset impairment" related to "a decrease in the estimated fair value of property, plant and equipment, and certain intangible assets."
For the full year, Sony anticipates slightly lower revenues of ¥7.214 trillion ($77.46 billion) and an operating profit of ¥32 billion ($343 million)--way up from the ¥30 billion ($321 million) operating loss it had forecast in February. A survey of analysts conducted by the Wall Street Journal expects the company will return to profitability during its current fiscal year, which ends on March 31, 2011. The company posted a ¥79.2 billion ($871.2 million) profit for the October-December quarter, when it was in the latter stages of a massive restructuring that saw 16,000 jobs eliminated.
Sony officials have also stated than they expect SCE to return to long-term profitability this year. During the October-December quarter, the company sold 6.5 million PlayStation 3s, bringing its life-to-date sales to 33.5 million. New sales figures for the console will be available on Thursday when Sony issues its final earnings report.
As of press time, Sony shares were up 3.59 percent ($1.18) and trading at $34.08 on the New York Stock Exchange. Many stocks were up sharply today after the European Union announced a nearly $1 trillion plan to contain its debt crisis.