Sony Financials Spiraling Downward: $2.2 Billion Net Loss This Year

| 17 Sep 2014 11:26

Smartphones are to blame.

Sony, Kaz Hirai promised a long time ago, would return to profitability. Now, for the sixth time in a row, Sony under Kaz Hirai's leadership has forecast a financial loss; but this isn't just any loss. It's a projected net loss of ¥230 billion, or $2.2 billion. Sony always expected to make a loss this financial year, but it anticipated a loss of only ¥50 billion. So what happened to quadruple that figure?

Smartphones happened, says Sony, as it cancels its dividend for the year. When Sony elected to sell off its PC division, it said it would concentrate on smartphones and tablets, but of that loss figure, a staggering ¥180 billion ($1.7 billion) can be attributed to its lackluster smartphones division. New Chief Financial Officer Kenichiro Yoshida, who only took up the post earlier this year, now has to wipe the egg off his face and see what he can do to make the figures palatable.

Part of the trouble, at least in the US, is that Sony's smartphone devices are only available via T-Mobile, currently only the fourth ranking carrier in that market. In July, Yoshida warned that the smartphone division could write down losses in its mobile division this year. Projected losses of this magnitude will only strengthen the argument that Sony should drop its loss-making smartphone division like a hot brick, and stick to selling PS4s and the like.

Source: Reuters

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