14 DAY TRIAL // Sony Corp, one of the largest consumer electronics vendor, is expected to release details of an operating loss of approximately 100 billion yen ($1.1 billion) for 2007/2008. With the announcement, Sony is going to record its highest operating loss in 14 years, according to the business daily, Nikkei. In addition, the reported loss comes against the company's forecast for a profit of 200 billion yen.
Nikkei also reports that the estimated operating loss could actually be double the aforementioned number, as it all depends on the inventory conditions in the January-March quarter. The alleged announcement comes after the company announced in October that it forecast a full-year operating profit of 200 billion yen for the year to end March 31, down from 475.2 billion yen in 2006-2007. In addition, back in December, the creator of the Bravia range of flat TVs and the PlayStation 3 gaming console said that it would have to cut 16,000 jobs, curb investment and pull out some businesses, in order to save approximately $1.1 billion a year, in response to the global economic downturn.
The expected loss announcement will come as the company's second major reported loss since it went public in 1958, and the first that sees Sony's electronics business suffer from the slow global demand. Back in March 1995, Sony took a one-time charge related to the company's U.S. film studio business, which was the primary reason for the operating loss.
News of the possible operating loss announcement took the company's shares down by 7.7 percent by early afternoon, as investors were worried that the alleged announcement could bring forth some other unpleasant surprises.
Sony isn't the only company that has seen its shares fall, as Toshiba has also seen a 4.2 percent drop in shares in Tokyo. The giant manufacturer is expected to report its third-quarter performance, for the three months to the end of December, on January 29.