Sony Expects Major Net Loss

Sony expects to report a loss of 260 billion yen, or about $3.1 billion for its fiscal year ending March 31 when it reports its full year financials on Thursday. It said that the impact of March’s earthquake and tsunami is estimated to be about $269 million (22 billion yen) in sales and $207 million (17 billion yen) in operating income.

The company downgraded its forecast, which had been for $856 million net income (70 billion yen) for the fiscal year in February, due to a writeoff of $4.4 billion (360 billion yen) against certain deferred tax assets at Sony Corp. and its group companies subject to consolidated taxation in Japan. Since the allowance is a non-cash charge, Sony says it will have no impact on cash flow or on the company’s long-term corporate strategy. The company expects to post operating income of $244 million (200 billion yen) and sales and operating revenue of about $8.8 billion (7.2 trillion yen), which it reported in February.

Sony estimated that it will incur incremental expenses directly related to restoration costs from the earthquake of approximately $134 million (11 billion yen), but that it expects most will be covered by insurance.

Regarding the recent security attacks on its PlayStation Network, Qriocity and Sony online Entertainment network services that occurred recently, the company expects an impact of approximately $171 million ($14 billion yen) on consolidated operating income. The company says the costs could change depending on whether any thefts occurred from the hacks, but currently “we have not received any confirmed reports of customer identity theft issues, nor confirmed any misuse of credit cards from the cyber attack.”