Sony facing record lossesBy Johan Keyter 24 May 2011 | Categories: news
Sony Corporation, one of the world's leading electronics manufacturers is facing its biggest financial loss in 16 years.
The company predicted profits for the year ahead back in February, but the Great East Japan Earthquake and tsunami damaged many of its factories across Japan, slowing down production and racking up huge repair bills.
Add to that the losses the company incurred over the recent PlayStation Network downtime ( $171 million), and it's easy to see why the electronics giant is facing financial woes.
Sony's losses regarding the PSN hacking saga doesn't impact financial results for this fiscal year (ended March 2011), however the cost of the attacks will certainly be seen in next year's profits. Sony has already suffered huge losses due to network upgrades, legal expenses and other costs.
Sony today released a revised financial statement (PDF) for the fiscal year that ended March 31, and while its February projection hinted at a $857 million profit, the new figures indicate that the company is instead facing a $3.2 billion loss.
Sony estimates the impact of the quake on sales to be around $269.4 million, while the impact on its operating income is stated to be around $208.1 million. Earthquake related losses also forced Sony to write off $4.4 billion against certain deferred tax assets in Japan.
The company expects its sales and operating income for the next fiscal year to flatten out again though, with a positive net income projected for fiscal year 2012 (as long as no more disasters take place that is).
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