Sony Reports Record $5.7 Billion USD Annual Loss
May 12, 2012 7:33 PM
However, the good news is that this number didn't meet the company's annual net loss estimates of $6.4 billion USD, which it predicted last month
It's become pretty well-understood that Sony is a sinking ship that requires quite a few fixes before it can ever be saved, but if its latest annual loss is any indication of what's to come, Sony isn't coming up for air anytime soon.
Sony recently reported a record-breaking annual loss of 457 billion yen ($5.7 billion USD), which is the company's fourth straight year of losses. However, the good news is that this number didn't meet the company's
annual net loss estimates of $6.4 billion USD
, which it predicted last month.
To break it down a bit further, quarterly sales increased 1.2 percent on-year to $1.6 trillion yen ($20 billion USD) and annual sales decreased 10 percent to 6.5 trillion yen ($81 billion USD). For January through March 2012 alone, Sony reported a loss of 255 billion yen ($3.2 billion USD).
A lot of Sony's issues have to do with its TV unit, which has seen eight straight years of quarterly losses.
Last December, Sony decided to shake up its TV division by
negotiating a buyout
of its 50 percent manufacturing stake with Samsung in the LCD joint venture. It also
split its TV division into three units
consisting of sales of LCD TVs, outsourcing manufacturing to cheaper foreign facilities and developing future TVs.
In March 2011, Sony's new CEO Kazuo Hirai said he would personally take over the struggling TV business himself while
making other management changes
to help bring the company out of the red. For instance, he made digital imaging, games and mobile the three core pillars of the company. Hirai also appointed new figures to oversee other departments and even introduced a new medical business unit.
Just last month, Hirai laid out a
whole new game plan
for Sony that aims to make the Japanese company profitable again. This plan included design changes to gadgets like TVs, a reduction of certain models, and expanded game titles and subscription services.
While these changes are a good start, the company
is still having a hard time for now. Sony ended up having to
cut 6 percent of its global workforce
in early April, which was about 10,000 employees.
Sony is staying positive though, hoping that entertainment blockbusters like "The Amazing Spider-Man," "Skyfall," and "Men in Black 3" will help the company out a bit.
"This year remains crucial for a recovery in our electronics business," said Masaru Kato, Sony's chief financial officer. "A fifth straight year of losses should never be tolerated."
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