Sony swings to Q3 operating loss as demand wilts
TOKYO (Reuters) - Sony Corp swung to a quarterly operating loss and reiterated a forecast for its first annual loss in 14 years, battered by a firmer yen and weaker demand while highlighting deepening woes at the electronics conglomerate.
The loss announcement was expected as Sony cut its annual outlook last week for the third time this business year and unveiled preliminary results for October-December.
Sony, which competes with Samsung Electronics Co Ltd in LCD TVs and with Canon Inc in digital cameras, is struggling as the global financial crisis grows into a broad recession and hits consumer demand for gadgets.
The Japanese maker of Bravia LCD TVs and Cyber-shot digital cameras reiterated its latest forecast of a record 260 billion yen ($2.9 billion) operating loss for the year ending March 31.
That would be a sharp reversal from a 475.3 billion yen profit in the previous year but in line with the consensus forecast for a 264 billion yen loss in a poll of 10 analysts by Reuters Estimates.
As inventories pile up and prices tumble, Sony is feeling the pinch of the downturn in every part of its operations, which range from semiconductors to movies and insurance.
Sony reported an operating loss of 17.96 billion yen for the three months to December, down from a 236.22 billion yen profit a year earlier and joining other technology heavyweights such as Samsung in posting a quarterly shortfall.
Net profit at Sony dived 95 percent to 10.4 billion yen on sales of 2.15 trillion yen, down about 25 percent.
Sony is a long way behind Apple Inc's iPod portable media player in a music market it created three decades ago with its legendary Walkman.
The maker of PlayStation game machines is also struggling to compete with Nintendo Co Ltd in video games after a decade of dominance from the mid-1990s.
Sony sold 4.46 million PlayStation 3 consoles in the latest quarter, down from 4.9 million units a year earlier. Nintendo is set to announce its quarterly earnings results and game console sales at 0700 GMT.
To shore up its mainstay electronics operations, Sony is taking restructuring steps including cutting 16,000 jobs and closing five or six plants.
Chief Executive Howard Stringer, who took the helm at Sony in 2005, has been trying to break down walls separating its various business units under a slogan of "Sony United."
His efforts had been seen as largely successful until the global downturn and the yen's persistent strength started to weigh on Sony's performance last year.
Ahead of the results, shares in Sony closed up 4 percent, outperforming the Tokyo market's electrical machinery index, which rose 2.3 percent.