Sony announced this morning it now expects to lose nearly £1.89 billion in the current fiscal year through March, over double its target from just three months ago, as it books expenses related to the sale of its share in its LCD joint venture with Samsung and the effect of flooding in Thailand.
The dire forecast came as the Tokyo-based electronics maker piled on a number of one-time expenses, including a tax charge related to its Sony Ericsson mobile phone venture, which it is currently turning into a fully-owned subsidiary, and the strong yen.
But Sony is having a brutal year even without those charges.
The firm's core consumer products division, which includes its well-known Walkman, Bravia, and Vaio lines, and accounts for half of its revenues, saw sales plummet during the key October to December shopping period from a year earlier, and swung into a deep operating loss. The company blamed stiff competition and the falling prices in the TV industry across its main markets in Japan, Europe and the US.
Sony released the earnings a day after it announced a leadership change for the company. Kazuo Hirai, who currently runs Sony's consumer products division, will become president and CEO from April, replacing Howard Stringer, who ran the company for seven years and introduced company-wide staff and operations cutbacks.
Thursday's results underscore that Hirai will have his work cut out for him. In the October-December quarter, which includes the key holiday shopping season, sales dropped 17.4% from a year earlier to ¥1.82 trillion (£15 billion). The company had a net loss of ¥160 billion (£1.33 billion) during the quarter, though that reflected non-business items.
Sony also booked a loss in its component business, and saw revenues and sales fall in its movie division. Its movie unit booked higher sales on hits like The Smurfs, but saw profit fall as theater shows like Arthur Christmas struggled.
In January, Sony sold off its entire stake in its LCD manufacturing joint venture with Samsung for about £590 million. The deal, which also incurred a heavy one-time accounting charge, allows the Japanese company to raise much-needed cash and also pursue a new TV strategy that relies more on outsourcing panel production for its TVs.