Sony set to post first annual loss in 14 years (CVG 13/1/09)

Sony is set to post an operating loss of some $1.1 billion for 2007-2008, according to business publication Nikkei.

If true, it would mark the company's first annual loss in the past 14 years, and the second since the company went public in 1958. Sony had previously forecast a profit of around $2.2 billion for the same period, whereas Nikkei claims that Sony's loss could stretch as far as that figure.


The reasons behind this anticipated loss are typical of many markets in Japan. A global recession continues to curb foreign demand for Sony's luxury items, while the strong Yen continues to interrupt the company's trade.

Nikkei's claims come from a source close to the matter, it is said. Sony has yet to make a revision to its forecasts, and it may turn out that the company won't need to, yet shares in the business sunk some 8 percent after the news broke.

Back in early December, Sony announced it was going to cut 16,000 permanent and part-time jobs from the business in an attempt to save £740 million. Yet Nikkei's report has sparked speculation that Sony may have to take further restructuring steps as its savings from that cut appear negligible for a business enterprise that spreads across numerous sectors.

Sony is scheduled to announce its quarterly earnings results on January 29.

Back in October, Sony had forecast a full-year operating profit of 200 billion for the 2007/08 fiscal year, a sum which fell from the previous year's figure of 475.2 billion.

Sony's only operating loss was reported by the group for the year ending March 1995. Primarily responsible for this was a heavy one-time charge connected to the firm's US film studio enterprise.