Sony Expects Additional $200 Million Fiscal Year Loss

[DrunknMunky Veteran]

Sony Expects Additional $200 Million Fiscal Year Loss

 

by Mike Futter on May 01, 2014 at 07:49 AM

 

Sony has released a revised forecast for the year ended March 31, 2014. The new numbers reflect a total loss of ?130 billion ($1.27 billion), from ?110 billion ($1.07 billion) as detailed in February.

 

Sony attributes the change to a number of things. Costs related to exiting the flagging PC business are higher than expected. Sony has noted further decreases in its sales following the announcement it will depart the market.

 

A decrease in Sony?s disc manufacturing business is attributed to lower demand for physical media. While Sony has been struggling overall, the games division has seen strong performance.

 

Sales of the PlayStation 4 have exceeded Sony Computer Entertainment CEO Andrew House?s expectations. At the launch of the PS4, House told us that he anticipated 5 million units sold by fiscal year end. Sony has moved over 7 million units to customers.

 

http://www.gameinformer.com/b/news/archive/2014/05/01/sony-expects-additional-200-million-fiscal-year-loss.aspx

 

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PS4 is doing great - but it's a different story for Sony

PC business sale leads to worse than expected loss for wider group.

 

By Wesley Yin-Poole Published Thursday, 1 May 2014

 

Sony is delighted with the performance of the PlayStation 4, which has shifted some 7m units worldwide since its launch last year, but it's a different story for the wider company.

 

Today Sony issued a warning that its 2014 financial year loss would be almost 20 per cent worse than it predicted in February.

 

Sony's new preliminary fiscal year net loss was an eye-watering 130 billion yen (approximately ?753m) - 18 per cent above the forecast it made just a few months ago. At one point it had expected to make a profit for the financial year.

 

Why? 30 billion yen (?173m) of additional costs associated with the sale of its PC business. Since it announced it was ditching Vaio, sales have been lower than expected, and so Sony expects to record write-downs for excess components in inventory and expenses to compensate suppliers for unused components ordered for Sony's spring PC lineup. The good news? Sony expects to offset these charges in the fiscal year ending 31st March 2015 because it's getting restructuring costs out of the way early.

 

Another issue boosting the expected loss is a 25 billion yen (?144m) impairment charge related to Sony's overseas disc manufacturing business. Apparently demand for physical media is "contracting faster than anticipated", especially in Europe, and so the future profitability of the business has been revised. Essentially, Sony reckons it won't make enough money from disc manufacturing to cover its business costs in this area.

The profit warning comes despite a rise in sales, which are expected to be up 14 per cent year on year.

 

Sony boss Kaz Hirai, former chief of PlayStation, has spent two years trying to trim down the company's operations in an attempt to return to profit, with poor sales of TVs stifling his efforts.

 

Amid the doom and gloom, PlayStation is doing well. During the quarter ending 31st December 2013 the Game business made a profit of $172m off the back of an impressive 64.6 per cent rise in sales year on year.

Sony will announce its financial results for the year ending 31st March 2014 on 14th May.

 

http://www.eurogamer.net/articles/2014-05-01-ps4-is-doing-great-but-its-a-different-story-for-sony

 

[Showan]

Ouch....  That sucks...  

 

This will put even more weight on the PS4's shoulders to carry the load.

 

Sony makes awesome products,  but they need to get away from the "Apple Premium" price points...  I know the Quality is there, but they have gotten out of control with pricing.

[+Audioboxer Subscriber²]

Ouch.... That sucks...

This will put even more weight on the PS4's shoulders to carry the load.

Sony makes awesome products, but they need to get away from the "Apple Premium" price points... I know the Quality is there, but they have gotten out of control with pricing.

Actually it should be the bottom to mid range TVs they chuck. Everyday consumers buy LG and Samsung, Sony need to create small batches of high end TVs for those with the money and scrap selling mid range TVs. The TV division is bleeding money.

I upgraded from my mid range Sony TV to a Panasonic Plasma and will probably never consider Sony for a TV again.

[Polonium]

Most Sony TVs aren't great to be honest. Not now.

[theyarecomingforyou]

Sony really needs to get its affairs in order, as it simply cannot continue on like this. Its stock is rated 'junk' by most analysts and it has been posting losses for years. Even if the PS4 does make money it will take many years for it to be profitable, as while Sony might be selling the consoles slightly above the cost of manufacturing it has to recover the costs associated with R&D, distribution, marketing, support and infrastructure. Sony also has to recover the losses from the PS3.

 

The only thing Sony really has going for it is brand recognition.

[jerzdawg]

Actually it should be the bottom to mid range TVs they chuck. Everyday consumers buy LG and Samsung, Sony need to create small batches of high end TVs for those with the money and scrap selling mid range TVs. The TV division is bleeding money.

I upgraded from my mid range Sony TV to a Panasonic Plasma and will probably never consider Sony for a TV again.

Def not, sadly for the consumers who care about quality the high end tvs just dont make money for the companies.  Its the reason why Pioneer left the industry, the Elite series was considered the best tv for years but due to the other tv companies just pumping out crap (and the people who bought them) it didnt make sense for them to keep selling.  Everyone wanted a "flatscreen" and as soon as Walmarts were selling 40" inch+ tvs for $400 (sometimes even less) people flocked so they can keep up with the Jones'.  The "highend" market is just too small, people still wonder why I spent $2k on a tv when I could have gotten the "same thing" for $1000, I cry a bit on the inside when they compare their 50inch Vizio to my Panny.    As far as PS4... this is great news for gamers, as one of the few markets that Sony is doing well, they will invest in their prize pig to keep the company afloat.

[Polonium]

Sony really needs to get its affairs in order, as it simply cannot continue on like this. Its stock is rated 'junk' by most analysts and it has been posting losses for years. Even if the PS4 does make money it will take many years for it to be profitable, as while Sony might be selling the consoles slightly above the cost of manufacturing it has to recover the costs associated with R&D, distribution, marketing, support and infrastructure. Sony also has to recover the losses from the PS3.

The only thing Sony really has going for it is brand recognition.

Not all of their products are rated junk. The latest smart phones and tablets are getting good reviews ... So much so I bought the xperia z tab

[Mr. Gibs]

Actually it should be the bottom to mid range TVs they chuck. Everyday consumers buy LG and Samsung, Sony need to create small batches of high end TVs for those with the money and scrap selling mid range TVs. The TV division is bleeding money.

I upgraded from my mid range Sony TV to a Panasonic Plasma and will probably never consider Sony for a TV again.

To be honest they don't even make their own tv panels anymore.

The panels come from Samsung / Sharp and all Sony does is put their firmware on it, slap a Sony badge and call it good.

[Xilo]

You can't run a business and expect to make money charging luxury prices for non-luxury items. For instance, there is no reason why a 64GB Vita memory card should cost as much as a 128GB microSDXC class 10 especially when the performance of the Vita cards is is equivalent to a class 4/6.

[spenser.d]

Not all of their products are rated junk. The latest smart phones and tablets are getting good reviews ... So much so I bought the xperia z tab

 

He's talking about their credit rating, which is considered to be in "junk" status (and that is an industry term for it).

[Polonium]

Ahh my bad

[123456789A]

Actually it should be the bottom to mid range TVs they chuck. Everyday consumers buy LG and Samsung, Sony need to create small batches of high end TVs for those with the money and scrap selling mid range TVs. The TV division is bleeding money.

I upgraded from my mid range Sony TV to a Panasonic Plasma and will probably never consider Sony for a TV again.

 

Are Sony TVs not good anymore? I have had several Sony TVs in the 90s and early 2000s and they were really great. Of course, this was before everything went to LCDs and whatnot.

[theyarecomingforyou]

Not all of their products are rated junk. The latest smart phones and tablets are getting good reviews ... So much so I bought the xperia z tab

As pointed out, I wasn't criticising the quality of Sony's products. In this case 'stock' refers to shares, not inventory.

[HawkMan]

Actually it should be the bottom to mid range TVs they chuck. Everyday consumers buy LG and Samsung, Sony need to create small batches of high end TVs for those with the money and scrap selling mid range TVs. The TV division is bleeding money.

I upgraded from my mid range Sony TV to a Panasonic Plasma and will probably never consider Sony for a TV again.

There is no money in selling low volume high end high premium tv's. Look at pioneer, no one was close to them, even today the best Panasonic Plasmas are just almost as good. Years after pioneer exited. Look further back in time and you see more evidence of this with B&O's exit from tv manufacturing. They only stayed in the market where investments and R&D is a lot cheaper and enthusiasts are willing to spend insane amounts for high quality audio. But I fear even the audio geek market may go the way of the dodo with teens today listening to music on YouTube and on crappy headphones. The old HiFi enthusiasts are going away.

[HawkMan]

To be honest they don't even make their own tv panels anymore.The panels come from Samsung / Sharp and all Sony does is put their firmware on it, slap a Sony badge and call it good.

Don't underestimate what good firmware can do for picture quality. In many cases the difference between a good and a brilliant panel is simply the firmware. Look at pioneers Kuro. That was all firmware and how the firmware controlled the panel drivers.

And even then Sony did a few years ago have an awesome LED TV. Not sure if they made the panel themselves. But it had their own RGB LED backlit back light. This tv was closed to pioneer plasma in quality. Since the back lights could not only local dim, but change color as well. Of course the tv was ridiculously expensive, few bought it and it was a loss and they stopped making it,

Are Sony TVs not good anymore? I have had several Sony TVs in the 90s and early 2000s and they were really great. Of course, this was before everything went to LCDs and whatnot.

They're as good picture wise as Samsung, so they'43 good, but not the best. Their top range models are better both in looks and quality to Samsung though. And for those that don't want extra sound their new mid range models have much better audio I believe whole they sacrifice the millimeter race to Samsung by making the tv a more sensible thickness allowing for better connectivity and room for speakers.

[neufuse Veteran]

How long has sony been losing money now? I remember 10yrs ago reading about how much money they were losing and people saying kill off PlayStation division to save money and kill off another entertainment division also

[Lord Method Man]

Are Sony TVs not good anymore? I have had several Sony TVs in the 90s and early 2000s and they were really great. Of course, this was before everything went to LCDs and whatnot.

 

Trinitrons were the chit back in the day. I haven't owned any of their post-CRT models though.

[neufuse Veteran]

Trinitrons were the chit back in the day. I haven't owned any of their post-CRT models though.

 

I have one Sony LCD, when I got it, it was buggy as heck. Their audio system would randomly crackle, yes crackle out and fade to silence. and sometimes it would just show no picture... wasn't a bad unit, turned out it was a firmware problem across all their TV's that year... took them 2yrs to fix the bug....

[Lenny Bruce]

Dang it Sony. You have to get your act together.

 

Sincerely,

A Sony Fan (LAST GUARDIAN?)

[gohpep]

Dang it Sony. You have to get your act together.

 

Sincerely,

A Sony Fan (LAST GUARDIAN?)

Sony announces $200 TV. It costs $1200 to make.

[Showan]

I have a Sony KDL 40V4100 in my bedroom. It's about 4-5yrs old. I love it

It's only 60hz, but the picture quality is good, but the sound is amazing.

[Vandalsquad]

How long has sony been losing money now? I remember 10yrs ago reading about how much money they were losing and people saying kill off PlayStation division to save money and kill off another entertainment division also

 

2004, 10 years now they have operated without profit with billions lost each year  :pinch:

[McKay]

2004, 10 years now they have operated without profit with billions lost each year  :pinch:

 

Their TV business and camera business have been leaking money for years. Pretty much the only profitable divisions are their Movie industry, their Record Company and the Playstation Division. Their movie company was on rocky water recently after financing several high profile movies that cost a tonne to make and didn't do so well in the theatres, but overall I think it's still profitable.

[(Account no longer active)]

I will never buy another Sony PVR/DVD-RW again. I did not get what I paid for (instead, something that skips with recorded HD content). Very disappointed. Announced firmware update never released.

 

Miss the 'Sony quality' of the 80s/90s/early 2000s. Trinitron TV's were the best.

[Vandalsquad]

Their TV business and camera business have been leaking money for years. Pretty much the only profitable divisions are their Movie industry, their Record Company and the Playstation Division. Their movie company was on rocky water recently after financing several high profile movies that cost a tonne to make and didn't do so well in the theatres, but overall I think it's still profitable.

 

Believe most of Sonys income comes from life/health insurance I remember reading at some stage.