Sony is predicting that it will post a yearly net loss of £720 million having initially predicted a net profit of £480m.
Sony is placing the blame squarely on the recent floods in Thailand which saw large parts of the country under several feet of water. The floods disrupted the production of Sony cameras and the company believes the floods alone wiped £220m off its bottom line.
However reduced demand for the company’s TV has also been blamed with the TV sales forecast cut by nine per cent, down to 20m sets. The TV division, which is currently being revamped, is heading for its eight straight annual loss.
In a bid to try and turn around the loss-making division, Sony has split it into three divisions since the beginning of this month – outsourcing, LCD TVs and next-generation TVs.
Sony’s share of the flat panel television market has been eroded lately by the likes of Samsung and part of the reason for this is down to Sony sourcing its flat panels from joint ventures - with the likes of Samsung - rather than from the open market.
Rumours suggest that Sony will end this relationship but the company has declined to comment on these rumours so far.
Only last week Sony got out of another joint venture, its smartphone venture with Ericsson, and it in areas such as smartphones, tablets, and its up-coming PS Vita handheld gaming console that it will be hoping to offset some of the losses made by the TV division.
The company is claiming there is huge potential for offering its own content on its own hardware including music, movies and games but has yet to do this effecdtively and seamlessly across all platforms.
It’s a tough time for Japanese companies at the moment with Nintendo last week predicting its first yearly loss in thirty years and Panasonic also posting poor results.