Sony Expects $2.9 Billion Loss

Jan. 22, 2009
First loss in 14 years

Sony on Jan. 22 forecast a much bigger than expected operating loss of $2.9 billion , the first in 14 years, as the global economic crisis saps demand for cameras, televisions and other goods.

The iconic Japanese company said it expects an operating loss of 260 billion yen for the current financial year to March, a dramatic reversal from an earlier goal of a 200-billion-yen profit.

The company, which is slashing thousands of jobs and axing plants, now sees a net loss of 150 billion yen for the current year, compared with an earlier projection for a 150-billion-yen profit. Sony blamed the worsening business environment, the stronger yen, weak financial markets and restructuring costs for the bleak outlook.

Under its first foreign boss, Howard Stringer, Sony has shed non-core assets and slashed thousands of jobs in recent years. Last month it announced 16,000 more job cuts along with factory closures.

A big loss would be a far cry from the operating profit of 475 billion yen the company made last year.

Before the economic crisis erupted Sony had been recovering from a difficult spell in the face of tough competition from rival products such as Apple's iPod and Nintendo's Wii.

Stringer was due to announce measures later in the day to shore up the company's core electronics business, amid reports that it will close a television factory in Japan, shedding 2,000 jobs.

Copyright Agence France-Presse, 2009

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