Sony reports $1 billion annual loss, first in 14 years

Sony said Thursday that it lost 98.9 billion yen, or about $1 billion, in the fiscal year through March and projected it would lose even more money this year amid a slump in consumer demand for electronics goods.

Sony said Thursday that it lost 98.9 billion yen, or about $1 billion, in the fiscal year through March and projected it would lose even more money this year amid a slump in consumer demand for electronics goods. It is the company's first annual net loss in 14 years.

The manufacturer of Bravia flat-panel TVs, Cyber-shot digital cameras and Vaio computers also said it will close three plants in Japan this year to help turn its business around. That makes the total number of factories it is closing globally to eight through March 2010 and leaves 49 Sony factories worldwide.

[Official Sony filing (.pdf)]

Sony is also in the process of cutting 16,000 workers from its payrolls.

Sony lost 165 billion yen, or about $1.73 billion USD, in the January-March quarter, compared to a 29 billion yen (or about $304 million) profit for the same period the previous year.

Sony is just the latest in a line of large Japanese corporations posting huge losses and bleak outlooks, including automaker Toyota and electronics manufacturer Hitachi.

Sony CEO Howard Stringer has yet to offer details of a turnaround plan. The company's competition in the global downturn has only grown thanks to successes by South Korea's Samsung and Taiwan's Acer, which produce more cheaper products.

The fiscal year loss was better than Sony's forecast for a 150 billion yen shortfall, thanks to TV prices holding better than expected. A one-time gain from a change in Japanese tax laws also helped, it said.

A bleak outlook remains, however, and Sony projects a 120 billion yen, or about $1.2 billion,) loss for the fiscal year through March 2010.

Sony continues to lose money in its game segment, where its PlayStation 3 home console and PSP device have struggled against rival offerings from Nintendo and Microsoft.

Sales for the fiscal year fell in all key markets: Sony was down 20 percent in the U.S., 17 percent in Europe and 14 percent in Japan.

The three plants the company plans to close are for cell-phone cameras, video recorder parts and systems used for smart cards, respectively.

As for layoffs, Sony said it was on track with its previously announced plan to reduce 8,000 of its 185,000 jobs around the world, and trim another 8,000 temporary workers who aren't included in the global work force tally.