Sony’s new president and CEO has quite a task on his hands. A day after Kazuo Hirai was appointed to replace Howard Stringer, who remains as chair, he announced the company plummeted in to the red by 320 percent.
Q3 net income swung from last year’s 72.3 billion yen profit to a 159 billion yen ($2 billion) loss, as sales dipped 17.4 percent. All divisions brought in fewer sales than the previous year.
Sony (NYSE: SNE) blamed the worsening global economy plus localised issues like Thai floods and the aftershocks in Japan’s post-tsunami economy…
What connected TV boom?
TV sales led the company’s declines, with revenue down 42.9 percent. But that’s partly because a Japanese government TV subsidy scheme had ended.
Games is Sony’s most resilient division – down only 9.7 percent.
But Sony said the business contributed to its overall losses because of the cost of re-promoting its previously hacked PlayStation Network and cutting PlayStation 3 price to head off Xbox.
Music can’t live on big stars
Sony Music Entertainment sales dipped 11.7 percent despite two big Adele releases.
Sony Ericsson (NSDQ: ERIC) is struggling against competition
Sales fell 15.7 percent because feature phone owners are moving to rivals’ smartphones. For the 2011/12 full year, sales are now forecast to be five billion yen (€50 million) below November’s forecast.
“As challenging as times are for Sony now, were it not for the strong leadership of Sir Howard Stringer these past seven years, we would have been in a much more difficult position,” Hirai said on his appointment.
“The path we must take is clear: to drive the growth of our core electronics businesses – primarily digital imaging, smart mobile and game; to turn around the television business; and to accelerate the innovation that enables us to create new business domains.”