Sony sees record $6.4 billion loss on tax hit

Tue Apr 10, 2012 2:38pm EDT
 

By Tim Kelly

TOKYO (Reuters) - Japan's Sony Corp flagged a record $6.4 billion annual net loss, double an earlier forecast and a fourth straight year of red ink, as it writes off deferred tax credits, heaping more pressure on its new CEO to turn around the electronics giant.

Sony, which plans to axe 10,000 jobs - around 6 percent of its global workforce - according to media reports this week, has been hammered by weak demand for its televisions and overtaken by more innovative gadget rivals such as Apple Inc and Samsung Electronics.

Yet, in a bid to ease investor concerns over its deteriorating bottom line, Sony forecast it would bounce back in the current year to end-March 2013 with an operating profit of 180 billion yen ($2.2 billion).

In a sign that Sony's woes are industry-wide among Japan's consumer electronics firms, LCD TV maker Sharp Corp on Tuesday also raised its full-year net loss forecast - to 380 billion yen ($4.67 billion) from 290 billion yen.

Kazuo Hirai, who took over as Sony's CEO this month, has said he is prepared to take "painful steps" to revive the company, insisting he would not hesitate to scale back or withdraw from businesses he deemed uncompetitive. He will lay out his revival strategy in more detail at a briefing scheduled for Thursday.

The Sony veteran, known for reviving the PlayStation gaming operations through aggressive cost-cutting, has promised to get the struggling TV business - which has lost $10 billion alone in 10 years - back on its feet within two years.

"There have been several reasons for our poor results," Chief Financial Officer Masaru Kato said at a news briefing in Tokyo on Tuesday, noting a strong yen and poor demand.

Asked whether the ballooning losses would cause heads to roll among Sony executives, Kato said: "We are aiming for a rebound and for this we have made management changes."   Continued...

 
Sony Corp Chief Financial Officer Masaru Kato attends a news conference in Tokyo April 10, 2012. Sony Corp forecast a record $6.4 billion net loss for the business year just ended, double earlier forecasts and a fourth straight year of losses, inflated by writing off deferred tax assets in the United States. REUTERS/Issei Kato