-
Hey Guest. Check out your NeoGAF Wrapped 2025 results here!
Sony posts loss of $3.2 Billion
- Thread starter xbhaskarx
- Start date
Neuromancer
Member
Oh Sony
XiaNaphryz
LATIN, MATRIPEDICABUS, DO YOU SPEAK IT
Do you know any good links to look into deferred taxes in general? It's one part of finance I haven't really looked into.Joey Fox said:
staticneuron
Member
surly said:
Sorry, the way you responded made it seem like you didn't understand the infographic.
Revenue: 77.5 million
Profit: 289 million
I doubt either number is meaningless and neither one is a negative number.
fabricated backlash
Member
teruterubozu said:
I think most people only are concerned by the huge losses. No one really expects (allthough some might hope) that Sony goes under because of this.
Fernando Rocker
Banned
Thing is...
They are not that relevant anymore... they don't have the best product of any class anymore...
Cameras? I prefer a Nikon or Canon than a Sony. SD, USB memories? I prefer a PNY. TV's? I think most people here at GAF prefer other brands than a Sony one.
Poor Sony... jack of all trades, master of none.
They are not that relevant anymore... they don't have the best product of any class anymore...
Cameras? I prefer a Nikon or Canon than a Sony. SD, USB memories? I prefer a PNY. TV's? I think most people here at GAF prefer other brands than a Sony one.
Poor Sony... jack of all trades, master of none.
XiaNaphryz
LATIN, MATRIPEDICABUS, DO YOU SPEAK IT
What's your take on Joey Fox's post? Relevant or doomsayer-esque?teruterubozu said:
Angry Fork
Member
Celine said:
bigtroyjon
Member
They have lost almost a billion dollars in market cap in a day, 10 billion in the last 3 months. That is significant. Things can be turned around but they are in a scary position and can't afford anymore bad luckteruterubozu said:
staticneuron
Member
surly said:
Of course because the infographic was talking about what happened last year.
teruterubozu
Member
bigtroyjon said:
The stock is about 3% down today, but it's nowhere near panic selling levels. Until investors jump ship, Sony will float.
CadetMahoney
Member
this thread to money market noobs:
gregor7777
Banned
Yikes. What a magnificent fall this company has taken.
Dedication Through Light
Member
surly said:
The response I was making was that it seems utterly incorrect to say Sony is "losing it" when their sales were going up and up. The image I imagine when people say Sony is "losing it" would be images of their products selling worst each year, products just not moving or being relevant, and people just not buying nor paying attention. Surely increasing sales meeting expectations, year over year increases according to the slide on the first page, would show that Sony is not "losing it" nor at a point where they are failing. Clearly their new management that took over when they were at their worst in the past decade has done some things right and leading them on a path of eventual profit with relevant products, services, and trimming unnecessary costs.(as they would have been).
Necromanti
Member
You make negative losses?RavenFox said:
This is sort of how I feel now. Years ago, say the 90s, Sony was a king among pawns when it came to hardware and quality of product. Today they do not make a bad product but I feel they are no longer leading the charge for anything.Fernando Rocker said:
Its a competitive market out there now and Sony makes great hardware but so do a lot of other companies. I hope they can turn things around, these reports are a little troubling to be honest.
lunchwithyuzo
Banned
Out of curiosity, what does Nintendo's market cap look like for 2007 vs 2011?teruterubozu said:
get2sammyb
Member
CadetMahoney said:this thread to money market noobs:
That .gif is fantastic.
This is a bad surprise but it's not as negative as it seems, because it does not affect the operative income and the cash flow of the company. The bad news is for shareholders who will get less money because of the reduced net income.
As far as I understand the point is that they will be facing significant costs because of the japanese earthquake. These costs will lower future taxable incomes to the point where they won't be able to recoup the deferred tax benefits they had before their expiration.
Let's make a small made-up example: a company has in 2011 a tax benefit of 100b yen which expires in fiscal 2012.That means that they don't have to pay taxes on the next 100 billion yen income they make in 2012. But what happens if in 2012 they make an income of just 10 billion yen? They lose their tax benefit on 90 billion yen, which means that they will have to pay taxes on a 90 billion yen future income which they could have avoided if their income was higher, in this example if they had recorded those 90 billion yens in fiscal 2012.
So in short: because of the costs associated with the japanese earthquake they think that they will be now forced to pay taxes for 3.2 billion dollars in the next few years which they could have avoided if their future incomes were higher. They have accounted for this 'loss' all in this quarter because they were probably forced to do so by law for fiscal clarity.
As I said the positive thing is that the operative side of things is not affected, which means that the company has not an actual profitability issue, the company can continue to operate normally, although if their profitability was better they could have avoided to pay such taxes.
It will be interesting on thursday to see the actual results per division without this valuation allowance and their shipment forecasts for the next fiscal year (PS3, NGP,PSP,etc).
As far as I understand the point is that they will be facing significant costs because of the japanese earthquake. These costs will lower future taxable incomes to the point where they won't be able to recoup the deferred tax benefits they had before their expiration.
Let's make a small made-up example: a company has in 2011 a tax benefit of 100b yen which expires in fiscal 2012.That means that they don't have to pay taxes on the next 100 billion yen income they make in 2012. But what happens if in 2012 they make an income of just 10 billion yen? They lose their tax benefit on 90 billion yen, which means that they will have to pay taxes on a 90 billion yen future income which they could have avoided if their income was higher, in this example if they had recorded those 90 billion yens in fiscal 2012.
So in short: because of the costs associated with the japanese earthquake they think that they will be now forced to pay taxes for 3.2 billion dollars in the next few years which they could have avoided if their future incomes were higher. They have accounted for this 'loss' all in this quarter because they were probably forced to do so by law for fiscal clarity.
As I said the positive thing is that the operative side of things is not affected, which means that the company has not an actual profitability issue, the company can continue to operate normally, although if their profitability was better they could have avoided to pay such taxes.
It will be interesting on thursday to see the actual results per division without this valuation allowance and their shipment forecasts for the next fiscal year (PS3, NGP,PSP,etc).
teruterubozu
Member
xbhaskarx said:
lunchwithyuzo said:
Well, he's right, it isn't great, but I would hardly chalk it all up to mismanagement. I mean, Nintendo's market cap went from 84 billion in 2007 to 28 billion today. Are they mismanaging? No. The drop in the dollar just killed all Japan exporters across the board.
XiaNaphryz said:
I don't know of any links, but I can give you a simplified explanation. The real accounting is significantly more complex.
Companies pay taxes on profits. If a company loses money, they obviously don't have to pay taxes. But in addition to have no tax bill due, you can actually carry forward the loss to next year, and deduct it from the income before you calculate your taxes. So, imagine the tax rate is 10%. In 2009, we made $1M, so we paid taxes of $100K. In 2010, we lost $1M, so we paid no taxes. In 2011, we made $2M. We would normally owe $200K, but we can carry forward our 2010 loss, and subtract it from 2011 profits. So our taxable earnings are only $1M, and our tax bill is only $100K.
So Sony has been losing money. They have been planning to deduct those losses from future profits, so when they do their earnings report, they actually count the money they will be saving on taxes in the future right now. Those are deferred tax assets. However, you can only carry forward losses for so long. And the GAAP accounting standards say that if you lose money for three years in row, you have to stop counting future tax savings as assets, because future tax savings only happen when you make a profit, and you haven't demonstrated any ability to make money. So now Sony has to take a big writeoff, because it's possible some or all of their future tax savings will never materialize.
There's no actual change in cash - they didn't have to write anyone a check. It's an accounting change reflecting future profits. It may be that they get all of the tax savings, or they might get some, or they might get none. But right now, they have to count it as none.
XiaNaphryz
LATIN, MATRIPEDICABUS, DO YOU SPEAK IT
Joey Fox said:
These posts appear to be saying the opposite of each other - damnit finance-GAF, can we get some consistency here for those of us trying to really understand this. :/Elios83 said:
staticneuron
Member
xbhaskarx said:
Is it me or people have not read the info graphic at all? If you read what it would say you would find out they are correct because it is talking about the same time period. The cumulative amount for the first 3 quarters last year were in fact a positive number.
http://www.sony.net/SonyInfo/IR/financial/fr/09q3_sony.pdf
Dedication Through Light
Member
Jokeropia said:
(A mere 0.5%?) I thought earlier it said up, that slide still says that sales were up which is what I addressed later in that post.
Fernando Rocker said:
I keep hearing this in regards to Sony, but I can't understand why.
"They should focus on a narrower set of products, they're involved in too many markets" - Really? I mean, what do you suggest they pull out of? What do you think would be a better focus for them? Why do people think Sony should become a company like Apple and focus on just a couple of products?
XiaNaphryz said:
I'll try to find Sony's latest financial statements and give you an example.
But until then, remember that there are several sides to a business.
1. Operations
2. Investments
3. Financing
Operations can be positive, but you could conceivably be overburdened with debt. Alternatively, the company could have made terrible investments which ruin the ability for a company to meet its cash obligations.
Like I said, I'll try to show you with Sony, if they have released their new financial statements somewhere I can download them.
The slide says that sales are expected to be up in the fiscal year ending March 2012, which at this point is just a prediction as the fiscal year just started.Dedication Through Light said:
http://www.sony.net/SonyInfo/IR/financial/fr/index.htmlJoey Fox said:
bigtroyjon
Member
XiaNaphryz said:
Just about everything written in the second quote is incorrect.
Dedication Through Light
Member
Jokeropia said:
Oh I see.
bigtroyjon
Member
M.D said:
They have lost money three years in a row now. The satus quo hasn't been working. When that happens usually people will start to discuss ways they can turn things around.
staticneuron said:
I don't know what the answer is regarding last year's profits, but just because something is in that infographic doesn't mean it's an indisputable fact. That infographic also claims the cost of a data breach per customer is $318, and also has some nonsense about an 8 year old on PSN and a Houdini movie...
In any case Sony has lost money three years in a row according to the Bloomberg article.
bigtroyjon said:
Elios83 "got f*cking PWNED"?
LQX
Member
Sony's biggest problem these days is that rely too much on their brand recognition to carry them. They carry themselves like Apple but they are not even close anymore. Their LCD's, Laptops and audio equipment is way over priced in many cases. Their TV prices have come down some but often times its a cheaper model going up against a very good Samsung model. Samsung and companies like Asus have eaten away at them yet they still refuse to price their electronics better.
Forsete
Member
Fernando Rocker said:
Nikon should pull out then, since they are smaller than Sony (who is the 2nd biggest), about to be surpassed by Samsung. If Sony dumps cameras, who will provide image sensors to everybody?
True regarding televisions.. they have been surpassed by a lot of cheaper brands. But quality costs, when Sony gives that up then they are dead in my eyes.
I've purchased some Sony non-gaming related hardware in the last 7 or 8 years and had them die on me long out of warranty. Sony has taken care of me each and every time.
I had a 2003 model Camcorder that stopped working in 2009. I called them up and they said it was a product defect. I had to pay to send in the camera but they sent it back to me fixed free of charge. My dad purchased a 42" Sony Wega LCD flatscreen in 2005. One of the first years of this particular model and it went bad last year. I called up Sony to see what they would charge to fix it and they offered to send my dad a brand new 40" top of the line 1080p Bravia free, or a very large discount on any of the larger models up to 55". He took the free one.
You can look at this two ways - Sony has started making shitty products over the last decade and maybe that's why they aren't the top dog anymore, or you can look at it from the standpoint that Sony takes care of their customers, regardless of product quality. So I'm shaky when it comes to buying Sony quality-wise, but I'm rock solid confident in their customer service department. This makes more than likely to continue purchasing Sony products in the future.
I had a 2003 model Camcorder that stopped working in 2009. I called them up and they said it was a product defect. I had to pay to send in the camera but they sent it back to me fixed free of charge. My dad purchased a 42" Sony Wega LCD flatscreen in 2005. One of the first years of this particular model and it went bad last year. I called up Sony to see what they would charge to fix it and they offered to send my dad a brand new 40" top of the line 1080p Bravia free, or a very large discount on any of the larger models up to 55". He took the free one.
You can look at this two ways - Sony has started making shitty products over the last decade and maybe that's why they aren't the top dog anymore, or you can look at it from the standpoint that Sony takes care of their customers, regardless of product quality. So I'm shaky when it comes to buying Sony quality-wise, but I'm rock solid confident in their customer service department. This makes more than likely to continue purchasing Sony products in the future.
Well I'm still looking for Sony's financial statements as they don't appear to be in the SEC's database.
But here:
This is a multiple step income statement. See where it says operating income? This is where Sony is doing well. However, the number seems to be excluding losses from the tsunami. That would be correct if the losses are classified as Extraordinary Losses under GAAP.
Losses can be classified as extraordinary, and not as operating if the event is unusual in nature and infrequent in occurrence. The tsunami may be seen as fitting this requirement, but keep in mind losses from the 9/11 terrorist attacks were not allowable as extraordinary losses. That operating income could potentially become an operating loss through a FASB or IASB ruling.
Below Operating Income you have Non-Operating or other. This area, in conjunction with the possible extraordinary losses, is what contributed to the Net Loss. It looks like Sony predicted Net Income before the tsunami happened, so they are probably in good shape.
You can still see how a company could be in bad shape though, as a company can lose more money with its investments and financing than it makes in operations.
But here:
This is a multiple step income statement. See where it says operating income? This is where Sony is doing well. However, the number seems to be excluding losses from the tsunami. That would be correct if the losses are classified as Extraordinary Losses under GAAP.
Losses can be classified as extraordinary, and not as operating if the event is unusual in nature and infrequent in occurrence. The tsunami may be seen as fitting this requirement, but keep in mind losses from the 9/11 terrorist attacks were not allowable as extraordinary losses. That operating income could potentially become an operating loss through a FASB or IASB ruling.
Below Operating Income you have Non-Operating or other. This area, in conjunction with the possible extraordinary losses, is what contributed to the Net Loss. It looks like Sony predicted Net Income before the tsunami happened, so they are probably in good shape.
You can still see how a company could be in bad shape though, as a company can lose more money with its investments and financing than it makes in operations.