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Earnings: Sony Records First Full-Year Loss In 14 Years

imageAfter a long period of uninterrupted growth, Sony (NYSE: SNE) has announced its first full-year loss in 14 years due to a downturn in consumer spend on gadgets and the collapse of financial markets and currencies in Japan and worldwide. In its full-year results to March 31, the company announced an overall sales drop of 12.9 percent and a net loss of 98.9 billion Yen ($1.01 billion), compared to profits of 369.4 billion Yen ($3.86 billion) a year ago. It could have been worse — Sony actually predicted a 150 billion Yen loss.

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The company argues that much of the loss comes from things it can’t control such as the depreciation of the Yen against the dollar and Euro, which cost it 279 billion yen ($2.92 billion), and the collapse of the Japanese stock market. Plus the downturn in global spend has hit it hard as sales of films, games consoles and software slow up in the recession. Analyst Fujio Ando of Chibagin Asset Management says (via “Their outlook gave me the impression that their business is heading for a gradual recovery”, but he adds, “it would all depend on whether they would be able to start producing popular products, because right now they have no ‘number one’ products.”

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Q4 losses, cuts: Sony also posted its second consecutive quarterly loss: between January and March, Sony’s Q4, the company made an operating loss of 294.3 billion yen ($3.09 billion), down from a 6.18 billion yen profit a year earlier. The company is busy cutting 16,000 full- and part-time staff in a bid to save $1 billion in 2009 and CEO Howard Stringer announced today an extra three factories in Japan will close to save $500 million, bringing the total plants to close by March 2010 to eight.

Games, electonics decline: Sony’s electronics sales were down 17 percent year on year to 5.48 trillion Yen ($55.9 billion), while in the games division sales dropped 18 percent to 1.05 trillion Yen ($10.7 billion). Sales of next-gen Sony consoles are increasing, but only just: 14.11 PSPs were sold during the year, a rise of 300,000, while Sony sold 10.06 million PS3s, a year-on-year rise of just 940,000. PS3 software continues to do well, however: 103.7 million units were shifted during the year, a 45.8 million increase.

Sony Ericisson losses: Downturns in profits at partner companies which contributed 125.9 billion Yen ($1.31 billion) in losses to Sony’s full-year earnings — its stake in mobile manufacturer Sony Ericsson (NSDQ: ERIC) cost 30.3 billion Yen ($309 million) alone.

Outlook: There’s no quick way out of the tunnel: despite the drastic cost savings, Sony is forecasting revenues of 7.3 trillion Yen ($76.43 billion) for the year to March 31 2010 and a loss of 120 billion Yen ($1.2 billion).