Sony reports Y98.9 billion annual loss; says it will close 3 plants in Japan

Thursday 14th May, 03:58 PM JST

TOKYO —

Sony Corp reported Thursday a 98.9 billion yen loss for the fiscal year ended March, its first net loss in 14 years, and forecast its red ink to swell this year amid a serious downturn in global electronics demand.

Sony also said it is closing three plants in Japan to turn its business around.

The Japanese electronics and entertainment company said no quick recovery was in sight, projecting a 120 billion yen loss for the fiscal year through March 2010 on expectations that the strong yen will also continue to erode foreign earnings.

The results are a reversal from the 369.4 billion yen profit Sony recorded a year earlier. Sales for the fiscal year through March slid 12.9% to 7.73 trillion yen, it said.

Sony, which makes Bravia flat-panel TVs and Cyber-shot digital cameras, joins a string of other big Japanese corporate names, including Toyota Motor Corp and Hitachi Ltd, that are announcing huge losses.

Sony is closing three plants in Japan by the end of December this year—one for cell phone cameras, another for video recorder parts and another for systems used for smart cards. After they are shuttered, the number of Sony’s global plants will dwindle from 57 last year to 49.

By operations, Sony said it had an operating loss in its core electronics segment because of the slowing global economy, price competition and a strong yen, which erased any benefits from better liquid-crystal display TVs.

Sony also continued to lose money in its game segment, where its PlayStation 3 home console and PlayStation Portable have struggled against rival offerings from Nintendo Co, the Wii and DS, as well as in some markets against the Xbox 360 from Microsoft Corp.

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5 Comments

chummin at 08:06 PM JST - 14th May

Open the floodgates ! Now that one of the sacred cows of Japanese business has openly announced domestic factory closings, well it won't be long for the others to follow. This is going to destroy the country ! Japan is not structured for this kind of crisis. Prepare for the worst, losing your job, your livelihood, your identity, and your income is a death sentence for thousands of salarymen everywhere... no joke, prepare for the worst.
namabiru4me at 08:31 PM JST - 14th May

Sony announced the closing of factories already back in January. Hitachi, Toshiba, and other consumer electronics makers are also "consolidating" operations all over the world, including in Europe, USA, and Mexico. Production is moving to China..where labor is cheap. Even Japanese products will be exported for assembly and re-imported as final "Japanese" product.
likeitis at 08:40 PM JST - 14th May

Sony also continued to lose money in its game segment, where its PlayStation 3 home console and PlayStation Portable have struggled against rival offerings

If the fools would have installed Linux on the PS3 like they said they would, and advertised the thing all the many many things it can do, I bet it would have sold better. I think they were thinking it would just sell itself.

Another problem here is they won the hi-def DVD war just as people have to spend a bundle to update their TVs to digital. Its not like they were complaining about the quality of the old DVDs! But just to watch TV in a few years, they have to do something, and no solution is cheap. So they are in no rush to go to blu-ray, and the easy way to do that is buy the PS3.

Imagine if there was a digital tuner in the PS3. Then it would really sell.
MakusuSun at 11:56 PM JST - 14th May

Sad to read that but it is predictable news. Talk to me and I'll get you up there again. Jia Mata.
JohnBecker at 01:10 AM JST - 15th May

If the Japanese government would just dump a buncha yen into the marketplace and buy up dollars, this situation would fix itself pretty fast. The Japanese economy isn't built to function well with a strong yen.