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Sony Forecasts $1.1 Billion Loss as Hirai's Revival Falters |
Tsepz_GP
Joined: Dec 27, 2006
Posts: > 500
From: Johannesburg, South Africa
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"Sony Corp. (6758) unexpectedly forecast a $1.1 billion loss for the year and will cut 5,000 more jobs as Chief Executive Officer Kazuo Hirai widens his restructuring plan in the face of shrinking demand for TVs and computers.
The net loss will probably total 110 billion yen in the year ending March 31, the Tokyo-based company said in a statement today, scrapping its revised October projection of a 30 billion-yen profit. Sony will split the TV business into a separate, wholly owned unit after saying it will post a 10th straight annual loss. It’s also selling the PC business to a Japanese buyout firm.
Declining sales of Sony’s key products are hampering Hirai’s revival efforts as the company struggles to find new hits that will attract consumers shifting to mobile devices from Apple Inc. and Samsung (005930) Electronics Co. The CEO already failed to meet his pledge to end losses in TVs after cutting at least 10,000 jobs previously and focusing the company on mobile devices, games and imaging products.
Sony doesn’t need as many business sections as it has,” Yasuo Nakane, an analyst at Deutsche Bank AG, said before the announcement. “It’s unfortunate that the market condition isn’t favorable for Sony in TV or cameras, but if you want to survive in a tough industry you have to move much faster.”
The company cites the costs of restructuring its TV and PC units for the revision. Sony is taking restructuring charges of 70 billion yen this year, an increase of 20 billion yen from its October forecast, the company said.
Hirai’s Plan
The world’s No. 3 TV maker kept its October sales forecast for 14 million sets after cutting it from the 15 million projected in February 2013. TV operations will lose 25 billion yen this year, the company said.
Sony lowered its sales forecast for Xperia smartphones to 40 million units from its earlier projection of 42 million units. The company rose to No. 3 in global smartphone shipment revenue in the September quarter, according to data compiled by Bloomberg.
A bright spot for the company has been its new PlayStation 4 game console, which sold more than 4.2 million units in the first six weeks after its November release, outpacing competing machines.
At the same time, demand for cameras and camcorders continues shrinking, and the TV business has lost ground in a contracting market to put the company further behind South Korea’s Samsung and LG Electronics Inc.
TV Revenue
Sony’s share of global TV revenue fell to 7.5 percent in the third quarter last year from 8.1 percent the previous quarter, according to NPD DisplaySearch. Sony ranked third, trailing Samsung and LG.
Billionaire Daniel Loeb’s Third Point LLC, which pushed for a spinoff of a portion of Sony’s entertainment unit last year, said in a Jan. 21 letter to investors that Sony needs to restructure its TV and PC businesses.
The company has been selling assets to generate one-time profit and said last month it began cutting jobs at its Hollywood film studio as part of $250 million in cost reductions.
Since the film unit posted a loss in the September quarter after “White House Down” flopped at the box office, Sony has found commercial and critical success with “American Hustle” and “Captain Phillips,” both of which garnered best-picture nominations at the Academy Awards. This year, Sony will release a sequel to 2012’s “The Amazing Spider-Man.”
Selling PCs
During the quarter, Sony agreed to sell its Gracenote audio-recognition software business to Tribune Co. for $170 million. It also sold a stake in satellite broadcaster SKY Perfect JSAT Holdings Inc. for 15.2 billion yen.
The company will sell its Japanese PC business to buyout firm Japan Industrial Partners Inc., Sony said today.
Sony’s long-term credit rating was cut to junk last month by Moody’s Investors Service, which cited the challenges of reviving the TV and PC units. Sony was already rated junk at Fitch Ratings, while Standard & Poor’s rates Sony at the second-lowest investment grade.
Sony rose 1.5 percent to close at 1,624 yen in Tokyo before the announcement, narrowing its loss this year to 11 percent.
Sony will start testing an Internet-based pay-television service in the U.S. this year, bringing live and on-demand programming to TVs and its PlayStation consoles, the company said last month. The company also will test a video-game streaming service for the PlayStation, smartphones and TVs."
Bloomberg
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Gitaroo
Joined: Aug 17, 2013
Posts: > 500
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wish they can keep the pc division around for a year longer so I can get a Tap 11 successor. First one has its flaws but I was amazed by how tin and light and the screen every time I see it at the sony store. According to the sony rumor mill, they are suppose to announce 3 tablet or something and 1 with Wacom stylus? Hope that one runs full windows 8. |
randomuser
Joined: Sep 13, 2011
Posts: > 500
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Nope they will exit the PC business and complete the sale of VAIO by March. So only about a month left. |
djin
Joined: Jun 13, 2007
Posts: > 500
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This sucks.. All they need to do is be more competitive in pc. They have good designs and good quality.. All that lacked was the specs. If they fix that.. They could still sell well. Maybe the next company might get it.
Xperia T + N 96 R.I.P Desire  |
Gitaroo
Joined: Aug 17, 2013
Posts: > 500
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On 2014-02-06 10:24:51, djin wrote:
This sucks.. All they need to do is be more competitive in pc. They have good designs and good quality.. All that lacked was the specs. If they fix that.. They could still sell well. Maybe the next company might get it.
not as simple as it sound, profit margin on pc are getting so thin, it even troubles companies like HP, Asus etc, thats why they are constantly looking to get into the mobile market. The profit is probably paper thin for VIAO due to the low sales and premium and higher quality build. Not to mention the money they dump into design earlier, and R&D to get slim body and light weight than all competitors. Everything cost money and no ROI which that is not even worth investing anymore in the market. If everyone say buying VIAO laptop and still pay premium like Macbook then yes. |
chunkybeats
Joined: Dec 08, 2005
Posts: 496
From: New Zealand
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So gracenote is going from Sony? What happens with gracenote recognition in their xperia phones? It's an awesome service, a little slow but perfect for sorting out album art and titles! |
chunkybeats
Joined: Dec 08, 2005
Posts: 496
From: New Zealand
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So gracenote is going from Sony? What happens with gracenote recognition in their xperia phones? It's an awesome service, a little slow but perfect for sorting out album art and titles! |
bart
Joined: Feb 03, 2002
Posts: > 500
From: Flanders
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This company destroyed itself when they stop being innovative
With Ericsson and Nokia gone: we must keep their spirits alive and buy JOLLA or YOTA |
Away
Joined: Oct 15, 2012
Posts: > 500
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^*facepalm* | |
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Access the forum with a mobile phone via esato.mobi
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Posted: 2014-02-06 08:18
