Aggressive cost cuts helped Sony turn the tide in the fiscal year that ended March 31, resulting in a net loss lower than forecast and operating profits back in the black, though sales still went south.
Sony reported on Thursday a net loss of 40.8 billion yen ($439 million) for the fiscal year ended March 31, compared with a loss of 98.9 billion yen in the previous fiscal year. Operating profits, which are earnings before interest and taxes, hit 31.8 billion yen ($342 million) following a record operating loss of 227.8 billion yen the previous fiscal year. Annual sales dipped 6.7 percent to 7.2 trillion yen ($77.5 billion) from 7.7 trillion yen in the previous fiscal year.
Results were mixed at Sony's various business segments. Operating losses shrunk but so did sales at the consumer products division, which sells Bravia LCD TVs, camcorders, and digital cameras. The same was true for Sony's network products and services segment, which handles the PlayStation and PSP game consoles, though unit sales for the PlayStation 3 grew to 13 million from 10.1 million the previous year.
Sony's music division saw its sales rise to 522.6 billion yen, a 35 percent jump from the previous fiscal year, thanks to new releases and the ongoing popularity of albums by the late Michael Jackson. Financial services also contributed to overall revenue, with its sales rising 58.2 percent to 851.4 billion yen for the year.
Despite the mixed bag, overall results were a healthy improvement from the previous fiscal year when Sony was hit by a $1 billion loss, its first annual loss in 14 years. Since then, Sony CEO Howard Stringer has been forced to slash costs and trim staff as a way to stem the losses. However, some industry watchers believe Sony's problems run deeper and that it may take more than cost cuts and layoffs to get the company back on track.
For the fourth quarter of Sony's fiscal year, sales reached 1.7 trillion yen, up 12 percent from the year-ago quarter, while the operating loss was 56 billion yen, an improvement on the year-ago quarter's operating loss of 294.3 billion yen. Net loss for the quarter was 56.6 billion yen, up from a 165.1 billion net loss for the same period a year earlier.
For the current fiscal year ending March 31, 2011, though, Sony has high expectations. The company is eyeing operating profits of 160 billion yen, a 404 percent jump year over year, on sales of 7.6 trillion yen, a year-over-year increase of 5 percent. The company is also betting heavily on new 3D technology, which Sony is looking to pump into its TVs, Blu-ray players, and PlayStation 3 game console.
Correction at 7:30 a.m. PDT: The earnings figures in U.S. dollars have been corrected. They are in millions and billions, not billions and trillions.