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Sony to post first loss in 14 years of ¥150B

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Amused_To_Death

Member
Will take a ¥60B in 'restructuring' charges (a 200% increase from their original forecast in October.

The following are factors that contributed to changes in operating income (loss) forecast for each business segment for the second half of the fiscal year, compared to the October forecast.

(1) In the Electronics segment, operating income (loss) is expected to be approximately ¥340 billion lower than our earlier forecast. Of this, approximately ¥250 billion is due to a deterioration in the business environment brought on by the slowing global economy and an intensification of price competition, approximately ¥40 billion is due to the impact of the appreciation of the yen, approximately ¥30 billion is due to additional restructuring charges and approximately ¥20 billion is due to a deterioration in equity in net income (loss) of affiliated companies.

(2) In the Game segment, operating income (loss) is expected to be lower by approximately ¥30 billion. Of this, approximately ¥15 billion is due to the impact of the appreciation of the yen and approximately ¥15 billion is due to lower-than-expected sales.

(3) In the Pictures segment, operating income is expected to be lower by approximately ¥13 billion due to restructuring charges, a decline in revenue as a result of the economic
slowdown and the impact of the appreciation of the yen.

(4) In the Financial Services segment, operating income (loss) is expected to be lower by approximately ¥65 billion mainly due to a deterioration in earnings at Sony Life Insurance Co., Ltd. resulting from a significant decline in the Japanese stock market. This is based on the assumption that the equity markets will remain at the December 31, 2008 level until March 31, 2009. As is our policy, the effects of gains and losses on investments due to market fluctuations since January 1, 2009 are not incorporated within our forecasts for the fiscal year ending March 31, 2009. Accordingly, market fluctuations could further impact the revised forecast.

(5) Operating income within All Other is expected to be lower by approximately ¥11 billion due to lower-than-expected sales and additional restructuring charges in the music business which constitutes a majority of the sales of All Other.
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http://www.sony.net/SonyInfo/IR/financial/fr/08revision2_sony.pdf
 
Of this, approximately ¥15 billion is due to the impact of the appreciation of the yen and approximately ¥15 billion is due to lower-than-expected sales.
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Wow, that conversion rate is really hurting them.
 
Was about to post this. Got a Wall Street Journal email alert in my mailbox 10 minutes ago.

TECHNOLOGY ALERT
from The Wall Street Journal.


Jan. 22, 2008

Sony said it would fall deep into the red in the fiscal year ending March, blaming flagging electronics business and price competition, as well as the yen's strength.

Sony expects to post a net loss of 150 billion yen ($1.65 billion) and an operating loss of 260 billion yen ($2.86 billion) for the year. That's a reversal of its earlier estimated net profit of 150 billion yen and operating profit of 200 billion yen ($2.2 billion).
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10mj0o2.jpg
 
SCE is far too large and unwieldy for the relative marketshare of their product, they need to downsize, sell some studios, cut costs, lay off workers and most importantly work on getting the PS3 as a profitable machine (even though it will probably be another few years before that happens).
 
So their gaming division is going to post a loss of $336 million dollars (last year they posted like a 50 million dollar profit)? Wow. Unless the exchange rate changes drastically this year, I'm not so sure we should expect any price cut at all.
 
jett said:
Waaaaaaowwww that's like 16.8 billion dollars. PS3 alone is responsible for around 3 billion. I guess Sony was just pretty much fucked in all sectors. I wonder how's Sony gonna recover from this.
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They'll ask for a bailout :lol
 
Wait, their loss is lower than expected, and they justify this with negative stuff such as lower sales etc ?

I'm confused
 
grandjedi6 said:
If by perfect you mean worst, then yes.
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Apparently from what I've read here, the PS3 is profitable and there will likely be a slim PS3 released this year. Also the professional market analysts predict 20+ million PS3 sales for this year, so think of all the profit.
 
Raist said:
Wait, their loss is lower than expected, and they justify this with negative stuff such as lower sales etc ?

I'm confused
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It's worded poorly, but I believe it just means that the loss is greater than anticipated, to the tune of those amounts.
 
SimpleDesign said:
Apparently from what I've read here, the PS3 is profitable and there will likely be a slim PS3 released this year. Also the professional market analysts predict 20+ million PS3 sales for this year, so think of all the profit.
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Pachter... is that you?
 
SimpleDesign said:
Apparently from what I've read here, the PS3 is profitable and there will likely be a slim PS3 released this year. Also the professional market analysts predict 20+ million PS3 sales for this year, so think of all the profit.
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:lol
 
Raist said:
Wait, their loss is lower than expected, and they justify this with negative stuff such as lower sales etc ?

I'm confused
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They had lower profit. Profit just happened to be a negative number. -10 is still lower than -1, for example.
 
So this is 30 billion yen MORE. Its an adjustment to an already dismal forecast.

I somehow dont think there's going to be -any- price cut for the PS3.

Ever.
 
Here's a bit of news, gaming division to be spared (as was expected):
Sony Corporation To Shut Domestic TV Plant, Shed 2,000 Jobs-DJ
Wednesday, 21 Jan 2009 12:09pm EST

Dow Jones reported that according to Nikkei, Sony Corporation plans to close one of two domestic television factories and cut more than 2,000 full-time jobs in Japan. The Company also aims to eliminate roughly 3% of its domestic full-time staff, or more than 2,000 workers, by the end of fiscal 2009. In a separate cost-cutting move, executive- and managerial-level bonuses will be slashed next fiscal year.
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Source: http://www.reuters.com/finance/stocks/keyDevelopments?symbol=SNE.N&timestamp=20090121170900&rpc=66
 
You guys are wondering about a price drop, I am wondering if there will be a PS4. If there is one, we might not like the direction it is going to go in.
 
Rhazer Fusion said:
You guys are wondering about a price drop, I am wondering if there will be a PS4. If there is one, we might not like the direction it is going to go in.
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Was there ever any doubt? I find it hard to believe that people need this sort of thing to happen before they figure out the meaning of the word "unsustainable".
 
Zhuk said:
SCE is far too large and unwieldy for the relative marketshare of their product, they need to downsize, sell some studios, cut costs, lay off workers and most importantly work on getting the PS3 as a profitable machine (even though it will probably be another few years before that happens).
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:lol :lol :lol :lol .....no!
 
Wolves Evolve said:
So this is 30 billion yen MORE. Its an adjustment to an already dismal forecast.

I somehow dont think there's going to be -any- price cut for the PS3.

Ever.
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Unfortunately, you are probably right. If they crop the price, they are screwed, if they don't drop the price, they are just as screwed. Wow.
 
why is this in gaming? the ps3 has nothing to do with the exchange rate which is killing jut about all japanese electric companies at the moment.
 
Rhazer Fusion said:
Unfortunately, you are probably right. If they crop the price, they are screwed, if they don't drop the price, they are just as screwed. Wow.
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If they drop the price, Sony is screwed, if they don't Sony Computer Entertainment is screwed.

The choice is up to Sony, i can guess which way they're going to go.
 
dalin80 said:
why is this in gaming? the ps3 has nothing to do with the exchange rate which is killing jut about all japanese electric companies at the moment.
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Because Sony has been known to make loss leader video game systems.
 
SIP YEK NOD said:
If they drop the price, Sony is screwed, if they don't Sony Computer Entertainment is screwed.

The choice is up to Sony, i can guess which way they're going to go.
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How is SCE screwed if they don't drop the price? Loss of marketshare? :lol

Their best bet is to stay the course, keep the same price and soak in some money for the time being.
 
SimpleDesign said:
How is SCE screwed if they don't drop the price? Loss of marketshare? :lol [/b[

Their best bet is to stay the course, keep the same price and soak in some money for the time being.
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Exactly. Sony as a company would eat any losses by the division, any gains down the road would be reinvested in SCE.
 
bakemono said:
Maybe instead of a price drop, they should go for price increase. How about that 500gig hard disk PS3 + bundles?
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Don't give them any ideas. That sounds like something they would actually try and then everyone would be scratching their heads as to why the sales are even worst than the previous year.
 
viciouskillersquirrel said:
-10 is still lower than -1, for example.
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Is it ?
:p

But yeah, this is poorly worded. "loss is lower than expected" sounds like "we didn't loose as much money as we initially thought" to me.
 
Sony expects to post a net loss of 150 billion yen ($1.65 billion) and an operating loss of 260 billion yen ($2.86 billion) for the year. That's a reversal of its earlier estimated net profit of 150 billion yen and operating profit of 200 billion yen ($2.2 billion).
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So if I'm reading this right, they're $5 billion dollars off their estimates? Jesus.
 
Rhazer Fusion said:
You guys are wondering about a price drop, I am wondering if there will be a PS4. If there is one, we might not like the direction it is going to go in.
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I bet a lot of people (especially Sony fans) will appreciate it. In the end, it's not about raw power, it's about gaming. And it's not like their former consoles were more powerful and more expensive than the competition.
 
yeah in times like these, marketshare should be the last thing on their minds.

but knowing sony, they'll probably do a price drop. :lol
 
bill0527 said:
Was about to post this. Got a Wall Street Journal email alert in my mailbox 10 minutes ago.
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Sony expects to post a net loss of 150 billion yen ($1.65 billion) and an operating loss of 260 billion yen ($2.86 billion) for the year. That's a reversal of its earlier estimated net profit of 150 billion yen and operating profit of 200 billion yen ($2.2 billion).
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How can they first estimate a net profit of 150 billion yen, and then expect a nett loss of 150 billion yen? That is missing the number by 300 billion yen (from 150+ to -150). If this estimate was done like 1 year ago, then i can maybe understand it, but i think that this 150 billion yen net profit estimate was done in October 2008, and it is not THAT long ago, at least in my opinion. It says so in this article at least, unless there is a typo or something that i missread:

http://finance.yahoo.com/news/Sony-shock-again-Slump-may-apf-14043766.html

In October, Sony said it expected fiscal 2009 operating profit of 200 billion yen ($2.2 billion), down from the 470 billion yen guidance it gave in July. It is expecting 150 billion yen ($1.7 billion) net profit, which includes taxes and extraordinary items.
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I assume that this is in October 2008 at least, and not in October 2007.

EDIT: I added some text.
 
Private Hoffman said:
So their gaming division is going to post a loss of $336 million dollars (last year they posted like a 50 million dollar profit)? Wow. Unless the exchange rate changes drastically this year, I'm not so sure we should expect any price cut at all.
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That was for one quarter last year not the entire year.
 
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