Sony blame floods in Thailand for quarterly loss
2 February 2012 by Olav Hellesø-Knutsen
Sony posts net loss of 1.58 million Euro. The company blame Thailand floods, exchange rate and weaker holiday sales in developed economies for the loss in its fiscal third quarter 2011 results
Did you know that Sony is earning money by selling life insurance via the Sony Financial Services division? According to the latest quarterly earning reports, that is how the company makes most of it money. It's not by selling televisions, computers, video games or smartphones. The company lost 85.7 billion yen by the sales of consumer products, 14.8 billion yen on professional, devices and solutions and a 43.1 billion yen loss for Sony Ericsson. On the positive side, Sony Pictures brought in 0.7 billion yen and Sony Music was profitable with 15.3 billion yen. But none of these divisions can be compared to the very profitable Financial Services which earned Sony 32.6 billion yen (428 million USD / 325 million Euro) during Sony's Q3 of its 2011 fiscal year.
Sony Ericsson did not contribute much to the mother company. A loss of 43.1 billion yen (552 million USD) during the last three month of 2011 was blamed on the decrease of feature phone sales which again was only partially offset by an increase in smartphone sales. The floods in Thailand in October caused component shortages which also affected the mobile phone sale. Now when Sony has bought out Ericsson from the joint venture, the company has no-one to share the losses with. Hopefully, the red numbers in the Sony Mobile division will be history soon.
In January this year Sony sold its share of S-LCD Corporation to Samsung. Sony has recorded a impairment loss of 63.4 billion yen (813 million USD/ 632 Euro) related to this transaction.
We do not think it was a coincidence that the announcement of the new CEO Kazuo Hirai was done yesterday. It is a message to the shareholders that the company will do whatever it takes to turn red to blacks. Sony is a company based on the values of Japanese culture. The Welshman Mr. Stringer being the boss for a couple of years did not change this. Do you think Mr. Hirai will be able to steer Sony in the right direction?
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That's rubbish surely??