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Sony hit by tax bill, doubles loss forecast; loses $6.4 billion

Sony's U.S. tax bill pushed the company into a further loss for 2011, but promises 2012 to be "much better".
Written by Zack Whittaker, Contributor on

Despite Sony receiving a new chief executive with a new company strategy in the wake of Sir Howard Stringer's resignation in February, the company has revised its financial projections that more than double its net loss to a record $6.4 billion for 2011.

Though it claims it will bounce back from the turbulent year, the reason for losing so much so soon speculated by Reuters is that Sony's inflated figure is due to it writing off deferred tax assets in the United States. It took a $3.6 billion tax charge.

But it promised to make an operating profit of about $2.2 billion in the current fiscal year. Sony's top seven executives, including outgoing Stringer, will not be taking their annual bonuses.

The company is under pressure, particularly in the wake of it buying out Ericsson's stake in the two companies' joint venture, in a difficult market share battle with other smartphone makers, like Apple and Samsung.

If more than $6.4 billion in losses is not painful enough, media reports suggest Sony could cut as many as 16,000 jobs worldwide as part of a company shakeup, with many jobs reportedly slashed at its chemical division citing reasons that the unit "did not fit well" with its restructuring plans. Sony remained silent on the issue and declined to comment.

But Sony's struggling television business is now under promise that it will start hitting profits in the next two years, despite losing around $10 billion in the past ten years; a move thought to be part of efforts to establish itself as a forerunner in the consumer space.

There is a silver lining to Sony's revisions, with the company projecting just shy of double its operational profit from around $1.16 billion last year, to $2.2 billion in 2012.

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