Sony warns of first loss in 14 years

Consumer electronics giant Sony warned Thursday that it will record a $2.9 billion operating loss this year, its first annual loss in 14 years.

The company, which blamed the loss on sliding demand for its products and a stronger yen, said it will detail plans to restructure late Thursday, according to a Reuters report. The warning follows reports Wednesday that Sony plans to close two television factories in Japan and shed 2,000 jobs.

Sony also said it expects to post a net loss of $1.65 billion in the fiscal year ending March 31. In October, the company predicted a $1.65 billion profit.

The company announced in December that it plans to lay off 8,000 workers in its electronics business worldwide as part of a broader plan to trim expenses and tighten its focus in a difficult financial climate. Sony, which currently has a full-time global workforce of 160,000, also said it plans to eliminate an additional 8,000 jobs, mostly contract workers and temporary employees.

Sony has stated that its goals are to reduce investment in the electronics business by about 30 percent in the coming fiscal year and to reduce the total number of manufacturing sites by about 10 percent, from the current total of 57.

[naterandrews]

For Sony to post it's first ever annual loss in over a decade is bad but not bleak. Showing it's first year over year loss over such a long time span shows that Stringer has his eye on the ball, and that Sony's longer term plans are pretty solid.

While the PS3 isn't the sales darling like it's brethren were, it is still slowly but surely building up an install base for Blu-Ray, and Sony direct to download media. Sure, the console war (for this generation at least) may be close to being finished, these consoles are a good start to Sony's entrance into our living rooms. A decent install base for Blu-Ray will lead the way for Sony to push more content and standardize Blu-Ray as the next generation medium.

Sony over the past year has extended it's alliance with Wal-Mart. While relegating your once premium brand to the bargain basement connotation that Wal-Mart brings degrades your "Premium" appeal, Stringer knows that this giant is where the sales are. By lowering the barriers to obtaining a Sony electronics item, they are on track to rebuild their once powerful and dominating electronics empire.

While we are in a recession right now, and quite possibly for the foreseeable future, Sony has positioned itself for a healthy and competitive long term future.

[Rants&Raves]

"blamed the loss on sliding demand for its products"

I hope they were not hinting that this was about the economy. Demand for Sony products is sliding because Sony used to be a premium brand that suddenly decided to switch their high-quality product for bad hardware with very bad software, breaking the relationship they had previously established with their customers, coasting on past glory. It is almost (but not quite) as if they had decided to capture the niche left by Goldstar when Goldstar became LG.

[technologyRules]

"It is almost (but not quite) as if they had decided to capture the niche left by Goldstar when Goldstar became LG. "

You're kidding right? I think Sony's quality and design tend to lead many of the other CE manufacturers today. They have broadened their line-up into the entry level arena and started using more 3rd party components, but this is insignificant compared to their competitors in most respects.

[Rants&Raves]

No I'm not. Toshiba, Samsung and Pioneer have taken the top of the field in the large-screen TV market, while Sony, which long dominated the home and studio TV markets, can't do with Bravia what it did with Trinitron: dominate by being head and shoulders above. Bravias are good -- not great -- but still command a premium that is simply not warranted.

Their GPS devices simply have atrocious software. They dumped their PDA line (saddled again with terrible software) with a few days' notice and left the customers dangling (I was caught with a TH-55 that was discontinued between the time I had ordered it and the few days it took to ship it). Their home audio line is overpriced and of laughable quality and performance.

It used to be that you could never go wrong buying a Sony CE product when you wanted the best and were willing to pay a small premium for it. Now, you still pay a premium, but the quality of what you buy isn't guaranteed and is often infuriatingly low. Sony Corp still holds great values in the media and gaming spheres, but their CE division is a huge disappointment.

[technologyRules]

"No I'm not. Toshiba, Samsung and Pioneer have taken the top of the field in the large-screen TV market."

I think that's debatable - the Sony products are certainly comparable to the best from any television manufacturer. Samsung, Sony, and Sharp are consistently the top sellers - where do you get Pioneer and Toshiba from? Ironically Sony and Sharp are jointly making panels, for example.

I don't care for the entry level Sony audio components, but the ES lineup is strong.

Is your assessment anything more than anecdotal? Nothing personal...

[supernatendo]

"Their GPS devices simply have atrocious software."

I beg to differ! I have a Sony Nav-U and would NEVER buy a garmin or tomtom or any other brand! You can do so much more with the NAV-U other than GPS, and the GPS is very accurate! The RadioShack guy was apprehensive to sell it to me even though it was cheaper and could do more and had a bigger screen, so when I asked why he was so against people buying it he was like, "well, some people complain that it can do so much that it is harder to learn how to use." I think he just wanted a bigger commission LOL! The GPS is easy to use and setup, the screen is very large and the quality is great, it automatically asks you if you want it to shut off and stop charging when you turn off your car to prevent a dead car battery, it automatically switches to dimmer light at night, blue tooth connectivity with cell phones for hands free calling, you can even watch movies on it with a pro-duo stick! The thing is just awesome, never had any trouble with the software!