Sony reports record annual loss of $5.7 billion

Published May 11, 2012

TOKYO — Sony Corp. racked up a record annual loss of $5.7 billion in its fourth straight year of red ink as the once-glorious maker of the Walkman and PlayStation struggles toward a turnaround under its new president.

The electronics and entertainment company, which also makes Spider-Man movies, on Thursday reported a loss of $3.2 billion for the January-March period — its fifth straight quarterly net loss — to round out a fiscal year that was the worst in its 66-year corporate history.

The latest red ink was worse than 1995, which followed Sony's ambitious but disastrous purchase of Hollywood studio Columbia Pictures.

Sony's recent troubles were worsened by factory and supplier damage in northeastern Japan, ravaged by the earthquake and tsunami last year. Sony also suffered production disruptions from the flooding in Thailand.

Quarterly sales inched up 1.2 percent to $20 billion, but annual sales plunged nearly 10 percent to $81 billion, as unit sales slipped in flat-panel TVs, video and digital cameras, game machines and personal computers.

Sony has bled money for eight straight years in its core TV business, bashed by competition from Samsung Electronics of South Korea and other Asian rivals. And consumers are flocking to products from Apple like the iPhone and iPad instead of Sony gadgets.

Sony is aiming for a comeback under Kazuo Hirai, appointed president last month, who has headed the gaming division and built his career in the United States.

Lasts month, Hirai said the company will cut 10,000 jobs, or about 6 percent of its global workforce, and turn a profit in TVs in the next two years.

Yasunori Tateishi, author of Farewell Our Sony, said Sony is in a bind because, even when its electronics segment fared well, its results would be pulled down by entertainment problems — or the other way around.

"Synergy is something that might happen, but it's not something a company should go after," he said. "It instead turns into an obstacle."

Sony said sales improved in its film business, lifted by television and video-on-demand for the Spider-Man series, but profits fell slightly, despite the popularity of The Smurfs and Bad Teacher, offsetting the failure of Arthur Christmas.

Chief financial officer Masaru Kato said fixing the electronics business remains critical, as revenue improves in entertainment this year with The Amazing Spider-Man, Men in Black 3 and the new James Bond film Skyfall, and music downloads start to make up for dropping CD sales.

"This year remains crucial for a recovery in our electronics business," Kato said, adding that the effort to reduce TV business losses was on track.