Smiles and Cries
Member
[Nintex] said:
I dunno can't they weaken enough for a takeover?
with so many similar Japanese Electronic giants out there waiting to pounce, I'm kinda surprised they can keep going like this untouched
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Sony posts loss of $3.2 Billion
- Thread starter xbhaskarx
- Start date
I dunno can't they weaken enough for a takeover?
with so many similar Japanese Electronic giants out there waiting to pounce, I'm kinda surprised they can keep going like this untouched
bigtroyjon
Member
Captain Tuttle said:
Has nothing to do with Sony's future earnings, accounting rules force them to do this after three losing years in a row. It's more about the earthquake causing a loss for this past fiscal year.
Scrow said:
Intriguing.
I was completely under the impression that no actual living beings with actual grey matter actual spoke this way, but I have truly learned something today.
Captain Tuttle said:
Not so much, as was said earlier a bit you are only allowed to float credits for so long and Sony has had too many down years in a row so they do not have that choice this time.
Captain Tuttle
Member
So I wasn't understanding correctly.bigtroyjon said:
Thanks for the clarification!
They're still making a lot of revenue and provide work for loads of people. Investors would've rather liked the profits to grow as fast as the company did and that never happened.Smiles and Cries said:
Japan wouldn't allow Sony to go all bankrupt or be taken over by an outside company though. Sony would get a bail out much like US and EU banks but it won't go that far.
zomgbbqftw
Banned
We just got some more detail on everything after a request.
Sony believe that the 5% margin will not be achievable in the current year because they are taking 167bn worth of charges. Stripping out one off charges they expect to make over 350bn operating profit for the current financial year of which they had offset a large proportion in tax rebates.
Now that they expect to make less money they can no longer offset as much profit, but accounting regulations dictate they must show all of their losses up front. They also think losses from the earthquake may last beyond the current fiscal year, but that will be detailed in Thursday's release or later.
Again, the underlying picture is one of health, but you can't discount the cost of the earthquake as quickly as I did. It will take them a full year to recover, maybe longer.
Our internal projections are being updated for Sony as we speak, but our early estimates say 3% in 2012, 5% in 2013 and 7% in 2014 barring any outside shocks. We await Sony's officialy estimates to make a full update...
Sony believe that the 5% margin will not be achievable in the current year because they are taking 167bn worth of charges. Stripping out one off charges they expect to make over 350bn operating profit for the current financial year of which they had offset a large proportion in tax rebates.
Now that they expect to make less money they can no longer offset as much profit, but accounting regulations dictate they must show all of their losses up front. They also think losses from the earthquake may last beyond the current fiscal year, but that will be detailed in Thursday's release or later.
Again, the underlying picture is one of health, but you can't discount the cost of the earthquake as quickly as I did. It will take them a full year to recover, maybe longer.
Our internal projections are being updated for Sony as we speak, but our early estimates say 3% in 2012, 5% in 2013 and 7% in 2014 barring any outside shocks. We await Sony's officialy estimates to make a full update...
CadetMahoney
Member
All's fine, they are only pre-paying taxes and it actually means nothing at the end of the day.
Forsete
Gold Member
No kidding the earthquake losses are big.
Wasnt one of their CMOS plants located in Miyagi province? And they had a Blu-Ray factory somewhere there. I remember the BD factory being flooded, and as far as I know BD factories have to be sterile. Sounds expensive cleaning that place up and replacing expensive machinery.
Wasnt one of their CMOS plants located in Miyagi province? And they had a Blu-Ray factory somewhere there. I remember the BD factory being flooded, and as far as I know BD factories have to be sterile. Sounds expensive cleaning that place up and replacing expensive machinery.
teruterubozu
Member
eh, even after all these tribulations, Sony's stock is holding up relatively well.
"If accounting income is $200, taxable income is $220, and the tax rate is 20%, then, according to GAAP, the tax should only be $40. Nevertheless, we are forced to pay $44 because IRS has a different set of accounting rules. Thus the extra $4 we are now paying is not an expense of this period (because in this period we only earned $200 under accounting rules), but rather a prepayment of next periods taxes."
Please kindly face the truth.
Please kindly face the truth.
le.phat said:
Glad to see more concise answer if you have one.
The thread title is pretty far away from truth and the professional definition.
How can taxes can be paid in advanced for 3 or 5 years ?
It only can be added later or deduced.
The Sony case is close to the former one because they underestimated them in fiscal years.
Captain Tuttle
Member
HaHa! Stock is down more than 24% this year. It's in the OP. They've gotten hammered.teruterubozu said:
zomgbbqftw
Banned
chris0701 said:
Yes, that's my fault. I misread the original release from Sony. I got it backwards, but your supposition is also wrong.
The situation as it currently stands - Sony built up losses over the last two years because of the recession and used a DTA to offset taxes to the Japanese government for the following seven years to the tune of 360bn. Under GAAP rules if you make 3 consecutive years of losses the total value of this asset must be written off as your profitability is too poor to make use of the DTA. Now, because of the earthquake Sony were forced to post a loss in the current year and this has forced them to write off that 360bn they had already 'banked'.
If Sony make enough profit it won't make much difference, but they will lose some of the 360bn if they don't post enough profit to make use of the whole asset they have written off.
teruterubozu
Member
Captain Tuttle said:
I meant since the PSN hack. Every exporting Japanese company took a massive hit after the earthquake (see Sony stock chart after April 11th and you'll see where the biggest drop occured).
dragonfart28
Banned
So to put the hack into perspective, it cost Sony $200 Million.
zomgbbqftw said:
I do not know why the description and perspective for Sony case goes fairly complicated here. In accounting text book the "deferred tax" one is pretty easy to understand as the example in my previous post.
Of course the 3.6 billions yen will be the upper bound of the "ADDITIONAL" taxes payment in 7 years.however, everything else like Sony prepaid something is pretty far away as normal insight.
Captain Tuttle
Member
Fair enough. And I apologize for my douchy post.teruterubozu said:
Kung Fu Grip
Banned
Aren't they suppose to report this too? Or is that in another report?gcubed said:
Those results is all i care about.
zomgbbqftw
Banned
Kung Fu Grip said:
Thursday.
Dedication Through Light
Member
apana said:
Losing it? They still make over $75+bln each year, I dont see what is being lost here and they even say sales are increasing. In terms of moving and selling products the image isnt as bleak and grim as people are making it seem, really.
A valuation allowance is never a good thing.
Losing your deferred tax assets means that the auditors, based on principles such as GAAP, believe that your company will not be profitable fast enough to make use of the deferred tax assets.
Why is this a bad thing? I would have to look at the financials, but this is a bad thing because losing your deferred tax assets could lead to going concern questions. A going concern question calls into question the ability of the company to continue in existence for even the next year.
However, since Sony had an operating profit, this shouldn't be all that ominous. It also sucks that the loss from writing down DTAs all comes in the same period, when it was really more attributable to the last three years.
Keep in mind that just because a company has an operating profit doesn't mean they are healthy. If you have bad Net Incomes but good operating profits you could be looking at a change in ownership at some point. Most of all, and the reason I wrote this post, is that losing deferred tax assets is not in any way shape or form a good thing. Investors would sell the stock based off of that fact alone.
Losing your deferred tax assets means that the auditors, based on principles such as GAAP, believe that your company will not be profitable fast enough to make use of the deferred tax assets.
Why is this a bad thing? I would have to look at the financials, but this is a bad thing because losing your deferred tax assets could lead to going concern questions. A going concern question calls into question the ability of the company to continue in existence for even the next year.
However, since Sony had an operating profit, this shouldn't be all that ominous. It also sucks that the loss from writing down DTAs all comes in the same period, when it was really more attributable to the last three years.
Keep in mind that just because a company has an operating profit doesn't mean they are healthy. If you have bad Net Incomes but good operating profits you could be looking at a change in ownership at some point. Most of all, and the reason I wrote this post, is that losing deferred tax assets is not in any way shape or form a good thing. Investors would sell the stock based off of that fact alone.
arnoldocastillo2003
Member
Ok, please don´t ban me but i don´t really know if this infographic goes here, because we are talking about SONY loss, but in this infographic you can see what it cost the PSN outage for SONY explained in a simpler way, if this doesn´t goes here, please delete or tell me and i will edit it:
Sony make $75 billion each year? I think not. They've posted losses 3 years in a row now. Not even MS or Apple make 75 billion dollars a year in profit.Dedication Through Light said:
What happened to the thread title? I don't think that accurately reflects the situation at all. It wasn't like that when I was here earlier.
yurinka
Member
We'll know it this thursday. Looks like the answer is yes, because somewhere said they were going to meet their schedule (ignoring earthquakes, hacks and these whatever 3 years of taxes).gcubed said:
Maybe it's revenue (before substracting looses) and not profit (after substracting looses).surly said:
staticneuron
Member
surly said:
Revenue does not equal profit.
teruterubozu
Member
They have a current market cap value of 26.32 billion. Please, enough amateur financial doomsayers.
teruterubozu
Member
ChefRamsay said:Didn't you know that GAF > Bloomberg? Been that way on the gaming side for years now
Sometimes gamers get it right before Wall Street, like Atari, for instance. But in this case, it's all hysteria.
Wazzim said:
Well, it ain't happening anytime soon for Sony. It's like Rapture pt. II around here with fudged calculations.
Fernando Rocker
Banned
Just a question:
Can a big company like Sony disappear just like that some day? News like these worries me... I work for the company.
=(
Can a big company like Sony disappear just like that some day? News like these worries me... I work for the company.
=(
Johnny2Bags
Member
It is impossible for a company to pay taxes ahead of time ... Just thought I'd call absolute bullshit on this one for you guys...
teruterubozu
Member
apana said:
Yup, but that was when it was 125 yen = $1. The dollar slide has killed all Japanese exporters.
get2sammyb
Member
Wow at the doom and gloom in here. So the company lost a lot of money, mostly at the hands of the earthquake, right? Some at the hands of the PSN hack?
Obviously terrible timing and bad luck, but everything else I've skim-read sounds like they are meeting estimates and doing fines in terms of the actual running of their actual business, no?
Obviously terrible timing and bad luck, but everything else I've skim-read sounds like they are meeting estimates and doing fines in terms of the actual running of their actual business, no?