Sony still hemorrhaging cash on TVs

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Sony still hemorrhaging cash on TVs

Sony, Japan’s top exporter of consumer electronics, posted its seventh straight quarterly loss due to falling demand for its TVs as consumers flock to devices made by Apple and Samsung Electronics.

The net loss hit 15.5 billion yen ($193.82 million) for the three months ended Sept. 30, compared with a net loss of 27 billion yen a year earlier, the Tokyo-based company said in a statement yesterday. That compared with the 15.6 billion yen average profit of three analysts’ estimates compiled by Bloomberg.

Sony is cutting 10,000 jobs and selling assets as CEO Kazuo Hirai focuses on mobile devices, games and digital imaging after four consecutive years of losses.

Sony sold a chemical products-making unit, stakes in two display-making ventures and invested in Olympus to revive growth after racking up 692 billion yen in losses selling TVs over the past eight years amid competition with market leader Samsung.

“TV sales are worsening this year amid economic downturns in the U.S. and Europe,” said Junya Ayada, an analyst at Daiwa Securities in Tokyo. “As the global recession continues, consumers are no longer spending much money on electronic products, as they now have a smartphone that can satisfy most of their needs.”

Hirai is investing in businesses including Olympus to revive growth after racking up 692 billion yen in losses selling TVs in the past eight years.

“Sony is reaching a dead end in terms of creating a successful product,” said Junya Ayada, an analyst at Daiwa Securities in Tokyo. “Sony’s market share in TVs will probably continue falling and lead to additional cost cuts in the next fiscal year and the following year unless they find a hit product.”

Sony’s run of four straight full-year losses, the worst since it listed in 1958, and a stronger yen pushed the shares to an intraday low of 849 yen on Sept. 5. That’s the lowest level for the stock since April 1980, according to data compiled by Bloomberg.

Worth over $120 billion in 2000, the brand once known for its Walkman music players is now valued at about $11 billion, compared with $560 billion for Apple and $175 billion for Samsung.

Industry-wide TV demand fell 8 percent from a year earlier in the second quarter of this year, according to DisplaySearch, led by a 77 percent plunge in shipments in Japan. Sony’s domestic peers Panasonic and Sharp also posted record losses last year mainly because of falling demand at their TV units.

Panasonic on Thursday said it will post a loss of 765 billion yen in the year ending in March, scrapping an earlier forecast for a profit of 50 billion yen.

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