Sony announces a third quarter net loss of 159 billion yen (£1.3bn), blaming floods in Thailand and flagging TV sales
The scale of Kazuo Hirai’s difficult task to turn around the fortunes of ailing Sony became more apparent today as the company announced a net loss of 159 billion yen (£1.3bn) for the October-December period of last year.
Announced as the incoming CEO yesterday, Hirai will be charged with reviving a company that has seen its fourth annual loss in a row when he takes charge in April.
A painful year
“I have a very strong sense of crisis about the environment surrounding us,” said Hirai at a news conference. “We cannot be afraid to make painful choices for the future of Sony. Our rivals and the operating environment won’t wait for us.”
Sony’s quarterly figures have meant that the annual forecast of a total 90 billion yen (£748m) loss has been increased to an estimated 220 billion yen (£1.8bn) for the year through March. The company suffered at the end of last year with flooding in Thailand, a weak economy and a strong Japanese currency. Sony made a further loss when it sold its share of a S-LCD panel-making venture with Samsung.
Sales were also hit, with the company reporting figures of 1,800 billion yen (£15bn) for the quarter, a 17.4 per cent drop year-on-year. Sony’s LCD TVs and PlayStation 3 consoles were among the lagging performers.
Hirai, who made his name leading Sony’s gaming division and will be taking over from Howard Stringer, will have to address growing concern that the company is failing to keep up with competitors. Microsoft and Nintendo have long been a thorn in Sony’s entertainment endeavours and TV/media device innovations from other companies like Apple and Samsung threaten the Japanese company’s hardware side.
“It won’t be easy for Sony to regain its lost ground under new leadership, as its overall competitiveness has sharply weakened,” Kim Young-Chan, an analyst at Seoul-based Shinhan Investment, told Reuters. “It’s got structural problems that will take years to fix.”
“It’s not just Sony, but Japanese IT firms have similar problems,” he added. “They are failing to innovate and produce industry-leading products in almost every area – from TVs to displays, tablets and smartphones.”