Sony makes a loss as quake and tsunami hit production
- 28 July 2011
- From the section Business
Japanese electronics maker Sony swung to a loss in the April-to-June period after the earthquake and tsunami hit production at its factories.
The company reported a net loss of 15.5bn yen ($199m; £122m) for the quarter.
That was down from a 25.7bn yen profit during the same period last year.
Sony also cut its forecast for its full-year earnings by 25% to 60bn yen, from an original projection of a profit of 80bn yen.
The company said sales and profit "were mainly affected by the negative impact of the Great East Japan Earthquake as well as the deterioration of the electronics business environment, and unfavourable exchange rates".
Sony was not the only electronics company to see its results for the quarter hit by the natural disasters.
Also on Thursday, Panasonic reported a net loss of 30.4bn yen, compared with a 43.7bn-yen profit for the same period a year earlier.
And Sharp recorded a quarterly loss of 49.3bn yen, down from a profit of 10.7bn yen last year.
Sony reported sales of 732bn yen during the first quarter, a 17.9% decline from the same period a year earlier.
The company said various factors had contributed to the drop, not least the falling prices of Liquid Crystal Display (LCD) TVs.
Sony also warned that as economic woes in its key markets continued, it expected TV sales to fall even further.
"LCD TV unit sales for the fiscal year are anticipated to be below expectations," it said.
However, analysts said that while demand from key markets had been falling, increased competition was also hurting the company.
"They are facing a lot of competition and also the strong currency. Competition is [increasing] globally," said Yoji Takeda of RBC Asia Equity Fund.
Mr Takeda added that for Sony to recapture its market share, it would have to come up with a range of more competitive products.
"The TV market is a very tough market because nobody is really making money and there is a lot of capacity available right now," he said.
Sony also said that the cyber attacks that some of its networks were subjected to earlier this year - which led to network services being temporarily shut down - had led to higher costs to cover items such as better security measures.
These costs will be recorded in the July-to-September quarter, the company said.
Sony discovered in April that hackers had gained access to its PlayStation Network, which was then shut down worldwide for more than a month while the company reviewed its security procedures.
Its network services for Qriocity and Sony Online Entertainment were also attacked.