Sony announces $3.1 billion annual loss

[News_Editor]

Sony announces $3.1 billion annual loss

2011-05-27 00:37:50 GMT+7 (ICT)

TOKYO, JAPAN (BNO NEWS) -- Sony, the Japanese electronics giant, on Thursday announced a $3.1 billion annual loss as of March 31. This was the third year in a row that the company reported losses.

The company said that a net loss attributable to Sony Corporation's stockholders was registered due to a non-cash charge to establish a valuation allowance agaisnt certain deferred taxes in Japan (about $4.4 billion).

In addition, the Japanese company is undertaking structural transformation initiatives to enhance profitability through various cost reduction programs and adoption of horizontal platforms.

The annual sales were 7,181.3 billion yen ($86.52 million), a decrease of 0.5 percent in comparison to the previous fiscal year. The lower profit was attributed to a decrease in sales in all segments except in Networked Products & Services (NPS) and Consumer, Professional & Devices (CPD).

On the other hand, operating income increased from 168 billion yen ($2.06 million) year-on-year to 199.8 billion yen ($2.40 million) despite an unfavorable impact of foreign exchange rates.

The earthquake and subsequent tsunami that devastated Japan earlier this year also affected Sony's expenses. The company recorded charges of 11.9 billion yen ($143 million) for costs at manufacturing sites and an incremental provision for life insurance policy reserves.

Also a decrease of sales resulting from the disaster caused an estimated 5.1 billion yen ($61 million) impact in the net margin loss. Furthermore, Sony spent 10.9 billion yen ($131 million) in restoration costs, including repair, removal and cleaning efforts at facilities.

In April, Sony's PlayStation Network and Sony Online Entertainment services were hacked and personal data of more than 100 million accounts was stolen. The service was unavailable for weeks until it was recently partially restored. The cyber attack cost an estimated $170 million in damages.

Sony will seek to improve its profitability through transformation initiatives and cutting expenses. The Japanese giant expects to return to profit by the end of the current fiscal year.

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