TOKYO—Sony Corp. said Thursday it veered into a fiscal third-quarter net loss of more than $2 billion and forecast a much wider full-year loss than previously expected, dragged down by losses in its television business and the impact of the strong yen on its European operations.
The Japanese entertainment and electronics conglomerate reported a net loss of ¥159 billion ($2.09 billion) for the quarter ended Dec. 31, compared with a net profit of ¥72.3 billion in the year-earlier period. Revenue fell 17% to ¥1.822 trillion during the quarter.
For the fiscal year through March, Sony said it now forecasts a net loss of ¥220 billion, compared with a forecast last November for a ¥90 billion net loss. It now expects revenue of ¥6.4 trillion, down from ¥6.5 trillion previously. It now expects revenue of ¥6.4 trillion, down from ¥6.5 trillion previously.
Sony's loss comes a day after the company announced plans to replace Chief Executive Howard Stringer in April with Kazuo Hirai, who oversees the company's videogame and consumer electronics divisions. A longtime veteran of the PlayStation business, Mr. Hirai will attempt to replicate his success with the videogame business at the electronics unit.
Thursday's revised-down earnings forecast stems largely from two joint ventures that Sony agreed to undo late last year.
In January, Sony sold its half of a joint venture to make liquid crystal display panels, called S-LCD, to partner Samsung Electronics Co. That resulted in an impairment loss of ¥63.4 billion.
Meantime it also reached an agreement to buy out its mobile-phone joint venture partner Ericsson to bring the smartphone business fully into the Sony fold. Sony incurred a ¥33 billion loss from that acquisition, expected to close in February, as Sony Ericsson incurred a charge to write down part of its deferred tax assets.
An unlucky mix of the March 11 disaster in Japan, the strong yen and the extreme flooding in Thailand that disrupted production last fall also played a major factor in the company's dour outlook.
"The impact of all these things is a very severe earnings report," said Sony Chief Financial Officer Masaru Kato, speaking at a news conference in the capital.
Atop incoming CEO Mr. Hirai's to-do list is finding a way to halt losses at the notoriously difficult television operations. Mr. Hirai has already scaled back the ambitions of the TV business, while pushing for new ways to lower parts procurement costs as well as rethinking the types of sets the company should make.
In November, Mr. Hirai said the TV business would lose ¥175 billion in this fiscal year ending in March, and then lose half as much in the next fiscal year, before turning a profit in the year ending March 2014. Two more years of losses at the TV division would result in nine straight years in the red.
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