Sony Corp. (SNE) on Thursday said it slipped to a loss in its third quarter - a period marred by losses at affiliated companies, mainly S-LCD and Sony Ericsson, and poor sales performance amid the Thailand floods and market deterioration. The Japanese consumer electronics giant, which is replacing its CEO Sir Howard Stringer with Kazuo Hirai, now sees much more loss and lower sales for fiscal 2012 than its earlier forecast.
Third-quarter net loss attributable to stockholders was 158.97 billion yen or $2.04 billion, compared to prior year's profit of 72.33 billion yen. Loss per share was 158.40 yen or $2.03, while prior year's profit was 71.96 yen.
The latest quarter results were hurt by impairment loss of 63.4 billion yen on Sony's shares of S-LCD Corp., which were sold in January, and a 33 billion yen valuation allowance on deferred tax assets related to Sony Ericsson Mobile Communications AB, the JV with LM Ericsson fully taken over by Sony.
The results also were hurt by restructuring charges related to Sony's Thai manufacturing facilities resulting from the floods.
Sales and operating revenues fell 17.4 percent to 1.82 trillion yen or $23.37 billion from 2.21 trillion yen in the previous year primarily due to the impact of the floods in Thailand, deterioration in market conditions in developed countries, and unfavorable foreign exchange rates. On a local currency basis, sales decreased 12 percent.
In the Consumer Products & Services segment, sales decreased 24.4 percent, reflecting lower LCD television sales due to price declines, the flood impact and unfavorable exchange rates.
Sales of Professional, Device & Solutions segment also declined 20.7 percent mainly due to decreases in component and semiconductor sales. Music sales decreased 11.7 percent due to fewer new significant releases and the yen appreciation.
In Pictures segment, sales grew 7.7 percent as theatrical revenues benefited by a greater number of films being released, while home entertainment revenues were hurt by fewer major releases. Financial services revenue increased 5.2 percent mainly due to an increase in revenue at Sony Life.
Sony Ericsson's net loss was 853 million euros, compared to income of 7 million euros last year. Sony's share of net loss of Sony Ericsson was 43.1 billion yen, compared to equity income of 0.4 billion yen a year ago. Sales decreased 15.7 percent to 1.29 billion euros that reflected lower feature phone sales which was only partially offset by an increase in smartphone sales. The results were negatively impacted by weaker holiday sales in developed economies, and certain component shortages resulting from the Floods.
Looking ahead for the fiscal year ending March 31, 2012, Sony now expects attributable net loss of 220 billion yen, compared to November forecast of 90 billion yen.
Consolidated sales are expected to be 6.4 trillion yen, slightly below the November forecast of 6.5 trillion yen, mainly due to lower expected sales, mainly in the CPS segment, resulting primarily from deterioration in the operating environment in developed countries.
In the previous fiscal year, net loss was 259.6 billion yen and sales were 7.18 trillion yen.
In November, the company had slashed its fiscal year 2012 forecast to a loss, citing the yen appreciation, the Thailand floods and lower than expected sales in the U.S. and Europe.
In Japan, Sony closed Today's trading at 1,328 yen, down 36 yen or 2.64 percent.
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