Sony predicts $3.2 billion loss following PSN hacking, Japan earthquake

Sony predicts $3.2 billion loss following PSN hacking, Japan earthquake

Summary: Things have been pretty grim over at Sony Corp. this year - so bad in fact that Sony has reevaluated earnings predictions for the 2010/2011 fiscal year from a profit to a loss of $3.2 billion.

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TOPICS: Hardware, Security
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Things have been pretty grim over at Sony Corp. this year - so bad in fact that Sony has reevaluated earnings predictions for the 2010/2011 fiscal year from a profit to a loss of $3.2 billion.

According to Sony's FY2010 forecast revision announcement, Sony has reversed the expectation of a ¥70 billion ($858 million) profit to a net loss of ¥260 billion ($3.2 billion).

The reasons behind the drastic earnings change are fairly obvious. Considering the majority of Sony news lately, it would be easy to pin all of it on the security nightmare that ensnarled the PlayStation Network worldwide for the last several weeks. While that mess was definitely a contributing factor, it is only expected to account for ¥14 billion ($171.2 million) in losses.

But there's really a bigger culprit. Sony is attributing at least ¥22 billion ($269 million) in losses to the earthquake and tsunami in Japan this past March.

During the fiscal year ended March 31, 2011, Sony expects to record charges of approximately 12 billion yen, consisting principally of idle facility costs at manufacturing sites and an incremental provision for life insurance policy reserves. In addition, there is an approximately 5 billion yen impact from the estimated net margin loss associated with a decrease in sales resulting from the Earthquake and an estimate of variable costs.

Furthermore, Sony expects to incur incremental expenses, including restoration costs (e.g., repair, removal and cleaning costs) directly related to the damages caused by the disaster to certain fixed assets including buildings, machinery and equipment as well as inventories, in addition to charges for the disposal or impairments of fixed assets and inventories.

Again, these figures are just estimates. Official numbers will be posted on Thursday.

Despite all of the bad news, Sony is trying to keep an optimistic outlook for FY2012 with expectations for higher consolidated sales. The official forecast for next year will be announced on May 26.

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Topics: Hardware, Security

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6 comments
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  • WAIT...this is BEFORE the hack?

    I can understand it being due to the damage needing repaired in Japan, but the hack DID NOT happen until April ...or at least discovered. As far as Sony has told us, this CAN NOT factor into their previous quarter earnings. I would like an audit personally. Either way, until they get REAL about security for the user, they deserve everything they get. Karma suks Sony, maybe Nolan Hass should have listened to those that were TRULY trying to help.

    The PS3 has ZERO packet filtering protection, cannot block illicit messaging from unknown users, cannot turn off in-game chat(while some games allow this, it can also be brute force defeated in many of those games). These are a simple few things that long should have been in place.
    Double Aught Code
    • To Keep This Customer...

      @Double Aught Code Sony needs to recognise, especially after these events, the users need to secure their communication line with the internet. Sure my router does alot of the work but my PC knows why it needs a firewall as well.
      Double Aught Code
    • RE: Sony predicts $3.2 billion loss following PSN hacking, Japan earthquake

      @Double Aught Code Sony has been teetering on the brink for a bit...
      jessiethe3rd
  • RE: Sony predicts $3.2 billion loss following PSN hacking, Japan earthquake

    Can't believe anything Sony says.
    james347
  • RE: Sony predicts $3.2 billion loss following PSN hacking, Japan earthquake

    things are bad.. not good at all..
    johnylin
  • RE: Sony predicts $3.2 billion loss following PSN hacking, Japan earthquake

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