Sony posts Q3 loss of $2.04 bn

MUMBAI: Hammered by the floods in Thailand, strong yen and weak global demand, Japanese consumer electronics and media conglomerate Sony announced net losses of $2.04 billion for the third quarter.

Sony recorded net income of 72.3 billion yen for the same quarter in 2010.

Sony Pictures increased sales by 7.7 per cent to $2.06 billion, but profits took a beating and fell by 85 per cent to $9 million.

At the same time, India proved to be a shining light. Overall Sony continues to see double digit growth from India and Brazil.

Sales in the music segment decreased by 12 per cent and operating income decreased ?4.2 billion year-on-year to ?15.3 billion.

Sales decreased primarily due to fewer new significant releases in the current quarter compared with the same quarter of the previous fiscal year, and the appreciation of the yen.

Operating income decreased due to the lower sales, partially offset by lower marketing expenses. Overall, the company has forecast a full-year operating loss, due to bad losses in its TV operations despite restructuring efforts.

Sony VP, corporate executive officer, CFO, Masaru Kato noted that sales decreased significantly year-on-year due to the impact of floods in Thailand, deterioration in the market environment in developed countries, and even greater relative impact of exchange rates. The floods in Thailand were one of the major factors behind the significant decrease in sales and deterioration in operating results for the quarter.

"Several of our manufacturing facilities incurred direct damage, resulting in a halt in production, and the delayed launch of certain products. Moreover, the supply chain across the entire industry was impacted, and the demand decreased as companies we do business with were affected. The decrease in sales and significant deterioration in equity in net income of affiliated companies caused us to record an operating loss for the quarter," he said.

Kato noted that China has reached the plateau and the company, thus, cannot expect the figures for their growth.