Sony Reports Record $5.7 Billion Annual Loss

For the forth year in a row, Sony Corp. has recorded an annual loss, amounting to 457 billion yen ($5.7 billion) for the May 2011-2012 period. The company lost 255 billion yen ($3.2 billion) for the January-March time period alone, resulting in the fifth straight quarter of losses for the electronic maker. In anticipation of huge losses, Sony’s stocks hit a 25 year low this week.

Not all is doom and gloom for the PlayStation and Bravia television maker as quarterly sales inched up 1.2 percent on-year to 1.6 trillion yen ($20 billion). However, for the year, sales plunged nearly 10 percent to 6.5 trillion yen ($81 billion), as unit sales slipped in virtually all departments, including flat-panel TVs, video and digital cameras, PlayStation, and VAIO. However with quarter sales up, this might be a sign of a turnaround as the Japanese giant continues to do everything it can to cut costs, including shedding off 10,000 jobs under new CEO, Kaz Hirai. Even more bullish is Sony who expects 2013 as the first year the company returns to black (profits). Those details, after the jump.

Since the start of the year, Sony’s lost 12 percent of its value, down to $15.5 billion or just 3 percent of Apple’s. A soaring yen that erodes the overseas earnings of Sony has also added to the companies annual loss. With the devastating Japanese earthquakes which damaged Sony’s factories and threw production off on many devices and the Thailand floods which delayed most of Sony’s anticipated cameras to the earlier part of 2012 now behind them, Sony expects profit for the fiscal year through March 2013 at 30 billion yen ($375 million). A big part of this rise in profitability will come from the companies growing fleet of Xperia smartphones and tablets as worldwide sales for both market categories continue to dramatically rise. Kenichi Hirano operating officer at Tachibana Securities in Tokyo had this to say;

“The operating profit forecast isn’t far off the level seen two years ago. This suggests we’re on a recovery trend and last year was definitely the bottom. But I think not everyone in the market is convinced of this, especially since the company lacks a solid plan to turn around its TV business.”

In their earnings call, Sony said that they plan to sell 33 million smartphones this year, up from 22.5 million last year. Other factors in Sony’s optimism include the companies entertainment division which will be releasing films like The Amazing Spider-Man, Men in Black 3 and the new James Bond film, Skyfall. With CD sales dramatically falling in the past few years, Sony is also optimistic about music sales with artists under them like Adele, Beyonce, and the late Michael Jackson as digital music starts to fill in the gap.

Though no specific plan has been announced for Sony’s bleeding television business, its seen as a key to the companies long term return to profitability as the division is potentially the biggest source of profit for the company while its currently been the biggest reason for the companies year after year loss. Chief Financial Officer Masaru Kato said;