Sony Preps Markets for Record Loss
Shares of Sony (NYSE: SNE) took a 10 percent slide Thursday on news that the electronics empire expected to post a record loss for its fiscal year ending in March. The Tokyo conglomerate issued a warning that it would report an operating loss of $2.9 billion for the year. The result will represent Sony’s first operating loss in 14 years.
Sony cites the troubled economy as well as a strong yen for the downturn. It’s also being trounced by Apple and Nintendo in mobile music and gaming, and is losing money on its flat-screen TV business. Under an aggressive restructuring, the company will shut down at least one TV plant in Japan and cut 30 percent of the employees in that division. Sony last month announced that 16,000 jobs--about 4 percent of the workforce--would be trimmed from companywide payrolls. The restructuring charge is projected to be about $1.9 billion.
News of Sony’s expected loss emerged last week on insider speculation that the loss would be around $1.1 billion. Sony’s power on the Nikkei immediately pulled the Japanese exchange down by about 5 percent. Sony’s ADRs on the New York Stock Exchange slipped by about $2 on the news, from $22.58 at close Thursday to back around $20 today.