Sony Posts Poor Quarterly Earnings, Cuts Sales/Profit Predictions
August 2, 2012 1:59 PM
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Sony CEO Kazuo Hirai
The company said a weak global economy and exchange rate moves are the cause
Sony is in hot water -- that's nothing we haven't heard before. The electronics company has been struggling with areas like its TV sector for a while now, and these troubles are reflected in the most recent financial earnings report.
Sony posted operating profit of $6.28 billion yen ($80 million), a significant 77 percent decrease compared to one year earlier. Analysts only predicted a 36 percent profit drop.
Sony had a 94 billion yen operating loss and $24.64 billion yen net loss for the quarter ended June 30.
Also, Sony slashed its previous financial predictions for the year until March 2013. It cut its operating profit forecasts from 180 billion yen to 130 billion yen, and also reduced its TV shipment predictions from 17.5 million to 15.5 million as well as its handheld device sales from 16 million to 12 million.
One glimmer of light, however, is that PlayStation sales are remaining at the previous prediction of 16 million sales.
So what's Sony's beef? The company said a weak global economy and exchange rate moves. Also, a lot of it has to do with the company's TV unit. 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.
But help may come in the form of the new CEO,
, who was appointed to the position in February 2012. He vowed to
take over the struggling TV unit
himself, and made
other management changes
to help bring the company back to life.
In April 2012, Hirai came up with an
entirely new game plan
for making Sony profitable, which included design changes to gadgets like TVs, a reduction of certain models, and expanded game titles and subscription services.
Despite Hirai's best efforts, the company had to
cut 6 percent of its global workforce
in April in order to save some cash. Later, in May, Sony reported a record
$5.7 billion USD annual loss
This article is over a month old, voting and posting comments is disabled
8/2/2012 3:22:14 PM
This article doesn't mention it but Sony WAY undersold their PSP and PSP Vita handhelds. It was already well known about their TV sales slumping and the results reflected the expectation.
Sony's biggest issues are largely surrounding its own identity. Sony has its hands in everything and one hand doesn't know what the other is doing. Additionally, there is VERY little do distinguish a Sony product from any other brand making the same products. From TV's, clock radios, phones, game systems, movies, music players, dvd/blu ray players, headphones, home theatre equipment, cameras, computers, tablets, etc... Sony just gets it all out there and hopes something will stick (Ps3). If sony restructured by cutting whole product lines and focused on what they can do well (while cutting many jobs), they would be able to produce a product people actually want and make money in the process. It was 10 years ago the last time I knew somebody who bought a Sony computer. Who, in 2012 would buy a Sony desktop?
Sony. Focus on what you are making money on and cut the dead weight!
RE: other areas
8/2/2012 7:46:05 PM
I won't buy Sony anything after working for them and seeing how they treat customers.
"It's okay. The scenarios aren't that clear. But it's good looking. [Steve Jobs] does good design, and [the iPad] is absolutely a good example of that." -- Bill Gates on the Apple iPad
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