Sony Corp Posts £685m Loss News

A drop in sales along with the appreciation of the yen has resulted in Sony Corp posting a smaller than expected loss for the financial year ended March 31st 2009, but it still represents the company's first annual loss in 14 years.

Sales for electronics giant slumped by 12.9% during the fiscal year to 7.73 trillion yen (£53.50 billion).  The company posted an operating loss for the period of 227.80 billion yen (£1.58 billion) leading to a net loss of 98.90 billion yen (£684.55 million).

Sales were down across all aspects of Sony Corp business due largely to the current economic crisis, with the Games division witnessing an 18% year-on-year decrease in sales of 1.28 trillion yen (£8.86 billion).  The division's operating loss was reduced however from last year's results, standing at 58.5 billion yen (£404.91 million) compared to last year's net loss of 124.50 billion yen (£861.74 million).

Hardware and software sales saw a decline, largely because the PS3 is failing to offshoot the decreasing PS2 market despite an increase in the number of PS3 titles sold.

The figures for hardware and software are:

Hardware Sales

PS2 7.91 million units (a decrease of 5.75 million units)
PSP 14.11 million units (an increase of 0.30 million units)
PS3 10.06 million units (an increase of 0.94 million units)

Software Sales

PS2 83.5 million units (a decrease of 70.5 million units)
PSP 50.3 million units (a decrease of 5.2 million units)
PS3 103.7 million units (an increase of 45.8 million units)


Sony Corp expects a tough current fiscal year ending March 31st 2010, with sales likely to drop to 7.30 trillion yen (£50.53 billion); an operating loss of 110 billion yen (£761.38 million) and a larger net loss of 120 billion yen (£830.59 million).

The Games division is expected to continue posting a loss due to exchange rates and the declining PS2 business, despite believing that the PS3 business will continue to increase and deliver stronger profitability.  Sony expects hardware sales to increase with a forecast of 13 million PS3 units, 15 million PSP units and 5 million PS2 units sold throughout the current fiscal year.  Software sales are expected to remain largely the same at a combined 240 million units.

Still analysts remain cautious.  "Their outlook gave me the impression that their business is heading for a gradual recovery," said Fujio Ando, senior managing director at Chibagin Asset Management.

"But it would all depend on whether they would be able to start producing popular products, because right now they have no 'Number One' products."

With expectations to shift a third more PS3s this year than last year (and the year before), perhaps rumours of the "Slim" model could prove to be true.