TOKYO — Sony unexpectedly forecast an annual loss, the sixth in seven years, casting further doubt on CEO Kazuo Hirai’s ability to revive the company.
The net loss will probably be 50-billion yen ($490m) in the 12 months ending March 31, the Tokyo-based company said on Wednesday. That compares with the 57.1-billion-yen profit average of 19 estimates compiled by Bloomberg and a 128.4-billion-yen net loss the year earlier.
Mr Hirai, who cut last year’s net-income forecast three times, is trying to overcome slumping demand for the TVs and personal computers that underpinned Sony’s rise into a Japanese icon. The company, which is cutting 5,000 more jobs and selling assets as it searches for new hits to build on its success with the PlayStation 4 game console, expects 135 billion yen of costs related to restructuring and exiting the PC business this year.
"If Hirai were in the US, shareholders would call for his resignation," said Yasuaki Kogure, chief investment officer at Tokyo’s SBI Asset Management, which holds Sony shares. "Hirai will say he needs time, but the market can’t wait. There will be growing concern about his ability."
The company’s shares traded in Germany fell as much as 3.9% and were down 2.4% at ¤12.40 on Wednesday in Frankfurt. Sony rose 1.1% to close at 1,805 yen in Tokyo before the announcement, narrowing its loss this year to 1.2%. Japan’s benchmark Topix stock index gained 0.4% on Wednesday.
Operating profit, or sales minus the cost of goods sold and administrative expenses, will probably be 140-billion yen this year, the company said. That compares with the 231.8-billion-yen average of 21 estimates compiled by Bloomberg and a 26.5-billion-yen profit a year earlier. The company is forecasting annual sales of 7.8-trillion yen.
Sony expects to book an 80-billion yen loss at the PC unit, which includes 36-billion yen in losses related to the exiting of the business, the company said.
Sony previously agreed to sell its PC business, which produces notebooks under the Vaio brand, to buyout firm Japan Industrial Partners.
"The high cost to exit PCs shows that it will be even harder for Sony to exit TVs," said Yasuo Nakane, an analyst at Deutsche Bank in Tokyo. "The TV sales target and smartphone sales target are too bullish and may not be achievable."
Sony said it expected to sell more so-called 4K ultra high-definition TV sets. Global sales may get a boost in demand from the upcoming soccer World Cup in Brazil.