Sony Declares Its Annual Loss to Be Around $3.2 Billion

Sony Corp. has announced an expected annual loss of $3.2 billion this year, rectifying its previous projection of an annual profit. The electronics giant is striving due to the interruption caused in the production line due to Japan's tsunami, and the problems were further amplified by the history’s largest hacker attack on its PlayStation Network. Sony’ is most popular for its gaming console, PlayStation 3, and Bravia flat-panel TVs. It declared its updated projection on Monday, showing a 260 billion yen ($3.2 billion) net loss for the fiscal year ended March 2011. Such loss was accounted mostly tracked back to the writing of 360 billion yen ($4.4 billion) to a tax credit booked in a previous quarter. The company had previously declared a projected 70 billion yen ($860 million) of profit in this year.

Along with plenty other Japanese manufacturers, Sony is still facing vulnerability in its production line due to the disastrous effects of earthquake and tsunami of 11^th March. Sony has retained its operating profit forecast at 200 billion yen ($2.46 billion) as it expects total sales of 7.18 trillion yen ($88.2 billion), barely any less than its previous projection of 7.2 trillion yen ($88.5 billion). The C.F.O. of Sony Corp., Masaru Kato, told that that only some parts of shortages caused by the earthquake have been improved, hence we cannot claim a full recovery yet. He added that "In the first quarter, we saw quite a major impact on our manufacturing activities.” Explaining that situation economically he stated that "negative factors have grown much bigger."

Sony Corp. is also faces a new and enormous challenge as its reputation stays on risk after one of the largest data theft in Internet History, affecting more than 100 million online accounts of Sony users. Sony immediately suspended its services temporarily since last month and has now slowly begun the restoration of its PalyStation Network services in the U.S. and Europe. It had cost Sony an additive 14 billion yen ($170 million), along with several lawsuits, in order to recover the losses in the identity theft insurance for customers, improvements to network security, free access to content, customer support and an investigation into the hacking.

Sony also had to recently witness the downfall in the sales of its other popular products like flat-panel TVs and gadgets like music players and portable devices rival to Apple's iPod, iPhone and iPad.

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Sunday, June 19, 2011