Sony Slips Only Slightly on $3.1 Billion Loss

Takes non-cash $4.4 billion write-down
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TOKYO: Shares of Sony today dipped on the confirmed news of a $3.1 billion net loss for its fiscal 2011. The company’s American Deposit Receipts, trading on the New York Stock Exchange, slipped from a close yesterday of around $27.60 around $27.14 today. The drop was more pronounced on Monday, when shares dipped below $26 after Sony warned it would be reporting a loss for the year ending March 31. They edged up over $28 briefly yesterday.

The March 11 earthquake and tsunami drove Sony to write down the value of certain of its tax-deferred assets to the tune of around $4.4 billion. The non-cash charge hit the bottom line hard and gave the company its third consecutive annual loss since it first started trading in Japan in 1958, according to Bloomberg.

Overall sales were down just half-a-percent to $86.5 billion. The average rate of the yen versus the dollar was 8.4 percent higher during F2011 than the previous fiscal year, Sony said. Operating income was up from 168 billion to 199.8 billion yen, or US$2.4 billion. Excluding restructuring charges, LCD TV asset impairment and affiliate companies, operating income was more than $3 billion, more than six times higher than F2010, Sony said.

The Consumer and Professional Devices division generated $43 billion in revenues, up slightly over F2010. Sony said the growth came from higher LCD TV set and semiconductor sales, partially offset by a decrease in media storage and optical disc drive sales. LCD TV set sales are strong in Japan, Sony said, where the government is subsidizing new digital sets for the upcoming transition from analog broadcasting, set to be completed in July. The subsidy program ended March 31.

The Networked Products and Services division, which includes games, generated $19 billion in revenues and $429 million in operating income.

Sony Pictures revenue fell 15 percent on the basis of the yen, reporting US$7.2 billion for F2011. Sony Pictures titles in the fiscal year included “The Karate Kid,” Grown Ups,” and “Salt,” which couldn’t keep pace with F2010 releases that included “2012,” “Angels & Demons,” and “Michael Jackson’s This Is It.”

“On a U.S. dollar basis, television revenues increased due to higher subscription and advertising revenues from a number of international channels and higher U.S. revenues from cable and syndication programming,” Sony said.

Sony’s TV properties include a majority interest in Game Show Network, the Sony Movie Channel and 3Net, it’s joint-venture 3D network with Discovery and IMAX. Its TV programs range from “Jeopardy” to “The Dr. Oz Show.”

Sony music revenues were down 10 percent on the basis of the yen, yielding US$5.7 billion for F2011. Sony holds much of the Michael Jackson catalog, sales of which exploded after the singer died suddenly in 2009. Sales of Michael Jackson titles continued to be strong in the F2011, Sony said.

Sony financial services yielded $9.7 billion. It holds a 50 percent interest in Sony Ericcson, but does not include those results in its consolidated financial report.

For the fiscal year ending March 31, 2012, Sony’s forecast called for sales and operating revenues to increase 4.4 percent on a yen basis.
~ Deborah D. McAdams

(Image by ykanazawa1999)