Sony posts annual loss, as economic downturn bites

The company forecasts that the loss will be higher in this fiscal year

Sony reported Thursday a loss for its fiscal year ended March 31, hit by the slowdown of the global economy, the appreciation of the yen, and a decline in the Japanese stock market.

The loss of ¥98.9 billion (US$1 billion at the exchange rate on the last day of the year) posted by the company is in sharp contrast to profits of ¥369.4 billion that the company recorded a year earlier.

The company has forecast a loss of ¥120 billion [b] for its current fiscal year ending March, 2010.

Revenue for the fiscal year through March dropped 12.9 percent to ¥7,730 billion. The company has forecast revenue to drop further in the current year by about 6 percent to ¥7,300 billion.

Sony is pushing through a restructuring program that involves the closure of factories to bring down the total number of manufacturing sites to 49 from the current 57. The closures will be across four sites in Japan and four outside the country, the company said.

The company also reduced the number of seasonal and temporary staff by over 8,000 at the end of March, as was earlier planned, and is on track to cut headcount in its electronics unit by 8,000 through early retirement and other programs.

Sales by the company's electronics unit was down by 17 percent during the year. The company's game segment, which includes the PlayStation, also saw sales drop by 18 percent during the year.

Revenue of Sony Ericsson Mobile Communications, the company's mobile phones joint venture with Ericsson, also fell by 19 percent on account of lower volumes.

Sony expects a decrease in sales from its gaming and electronics segments in its current fiscal year, although it expects an uptick from its pictures business because of a number of new movies scheduled for release during the year.

The company's financial services unit is also expected to post an increase in revenue.

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Tags Sony Ericssonfinancial resultssonyeconomic downturn

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