We shouldn’t be too surprised that Sony has announced losses of £2 billion considering recent events, but when you remember it was expected to post a profit for the first time in three years, then the size of the losses is indeed staggering.
Ahead of its full year results’ announcement on Thursday, Sony has revealed that it has revised its financial results since first publishing them in February. Sony now expects to post a loss of 260 billion yen (£2 billion) in what will be shock news to analysts who predicted Sony would post a profit of 76 billion yen (£60 million). Sony said the major change came about because of a “non-cash charge” of 360 billion yen (£2.75 billion) in relation to some Japanese tax credits. The tsunami that hit the east coast of Japan on 11 March is also going to have an impact on sales, with Sony estimating the hit to be in or around 22 billion yen (£170 million). The other major factor is of course the hacking crisis that hit the PlayStation Network (PSN) last month, and this is expected to end up costing 14 billion yen (£110 million).
With up to 100 million PSN and Qriocity users affected by the breach in security, Sony was in the media limelight for all the wrong reasons for more than two weeks. Along with plunging sales at home in Japan due to the tsunami, Sony is facing a struggle to get back on its feet. Since posting its first ever loss only three years ago, Sony has since been consistently under-performing and shareholders will now be looking for a scapegoat to take the fall. The man in the firing line will undoubtedly be Welsh-born chairman and chief executive Howard Stringer.
While Sony has tamely indicated that its results for the coming year will bring a profit, it is hardly a strong indication for the future of the company and few believe them apparently with Sony shares fell by a further 10 points following the announcement.