Sony posts record annual loss of $5.7 billion, but expects better fortunes by 2013

Sony posts record annual loss

Once the king of consumer electronics, Sony continued its slide into oblivion this week, posting a record annual loss of approximately $5.7 billion for the past fiscal year, which ended on March 31. This is the fourth year in a row that Sony has lost money, and the worst financial showing in the company’s 66-year history.

Sony says that its financial losses were exacerbated by the devastation caused by the earthquakes and tsunami in Japan, and the floods in Thailand last spring, reports the Associated Press. As a result of those natural disasters, Sony suffered damages to its factory as well supply chain disruptions, all of which lead to a weaker bottom line.

Earlier today, Sony announced its earnings for the January through March period, and it doesn’t look good: The company has so far lost $3.2 billion in 2012, marking the fifth straight quarterly loss for Sony. Despite a 1.2 percent boost in quarterly sales to $20 billion, sales for the full year dropped by nearly 10 percent to $81 billion. The plunge comes as a result of poor sales in a number of product categories, including TVs, digital cameras, PCs, and gaming.

Despite its struggles in the consumer tech section, Sony’s entertainment endeavors helped stifle the financial blow, with Sony Pictures enjoying a 9.6 percent increase in revenue for the quarter, allowing it to bring in $416 million in profit on $8 billion in sales. Strong video-on-demand sales, as well as money made from Spider-Man merchandise helped lead Sony’s profits in this sector.

Its music business, on the other hand, dropped 6 percent in sales from $5.7 billion down to $5.4 billion, as a result of increasingly weak CD sales. This resulted in a 5.2 percent year-on-year drop in operating profits for Sony Music, from $475 last year to $450 million.

Last month, Sony’s new CEO Kazuo Hirai announced that the company will cut 10,000 jobs, and spend $1 billion on restructuring, in an attempt to turn the business around. Furthermore, Hirai plans to refocus the company on three core businesses — games, mobile devices, and digital imagine products.

Through these efforts, Sony expects to turn its financial fortunes around, predicting an annual profit of $375 million for the fiscal year ending in March 2013.