Sony hit hard, suffers first annual loss in 14 years

Slumping sales and lack of consumer confidence caused Sony to suffer its first annual loss in 14 years..

Sony, once one of the world's largest consumer electronics manufacturers, on Thursday said it lost roughly $1 billion (98.9 billion yen) in the fiscal year that ended March 31, marking its first annual loss in 14 years.

And Sony predicted it would lose more money throughout the year as the declining economy is doing little to spark consumer confidence.

Sony on Thursday said it will close three plants in Japan in 2009 to cut costs. Those three are in addition to the five other factories Sony plans to close by March 2010. The move will reduce the number of Sony's factories from 57 to 49. Sony is also cutting 16,000 jobs.

Along with a slump in consumer spending, Sony pinned its 98.9 billion yen slide on the appreciation of the yen and a drop in Japan's stock market. That loss comes just a year after Sony posted 369.4 billion yen in profits.

The loss, Sony said, is in part because of declining sales in all key markets, which saw sales fall 20 percent in the U.S., 17 percent in Europe and 14 percent in Japan.

The weakening economy has also prompted the electronics giant to predict an even bigger loss next year. Sony has forecast a loss of $1.2 billion (120 billion yen) for the current fiscal year, which ends in March 2010.

Sony's revenue also dipped in the fiscal year, falling 12.9 percent to 7.730 billion yen. Sony said it expects revenue to decline further in fiscal year 2010, dropping about 6 percent.

Electronics sales, usually Sony's bread and butter, were also down throughout the year, dropping 17 percent.

Sony's gaming segment also took a whack, falling 18 percent in the fiscal year, despite strong PlayStation 3 and PlayStation Portable sales, both of which saw increases in the fiscal year.

On the mobile phone side, Sony Ericsson, the company's joint venture with Ericsson, fell 19 percent due to lower volumes, Sony said.

And while Sony's movie and home entertainment division suffered through the year, Sony expects its upcoming roster of major motion picture releases to stabilize that space.

See original article on CRN.com