- Apr 7, 2012
Sony shares tumble to 31-year low amid record losses
Newly appointed president Kazuo Hirai will have to tackle a host of issues at Sony
Sony shares have tumbled to a 31-year low, a day after the company reported a record annual loss of 456.7bn yen ($5.7bn; £3.5bn).
Sony shares fell as much as 6.7% to 1,132 yen on the Tokyo Stock Exchange.
The firm, which has been making a loss for each of the past four years, has forecast that it will return to profit in the current financial year.
However, analysts said that investors were not convinced the firm would be able to achieve that target.
"Sony is facing a lot of difficulties and the new president has not been able to produce a clear plan as to how he will turn around the company," Yuuki Sakurai of Fukoku Capital Management told the BBC. "Even the little that investors have heard, they are not very impressed with."
'Remains at risk'
The Japanese electronics maker has been hit by a spate of issues in recent times. Its TV business, one of its biggest growth drivers in the past, has been hit hard by increased competition and falling prices. The division has been making losses for eight years in a row.
The company has also lost ground to rivals in the gaming and mobile phone business.
Analysts say the firm has also been lagging behind in innovation and product development, which are key to growth in the consumer electronics sector.
To make matters worse, Sony has had to deal with rising costs and a strong Japanese currency which have also hurt its earnings.
Earlier this year, the newly elected president and chief executive, Kazuo Hirai, announced that the firm would cut 10,000 jobs as part of a major reorganisation.
However, analysts warned that despite the restructuring plan, a falling market share in key segments may continue to hurt Sony.
"On the whole, [Sony] remains at risk of ongoing losses in its cellular application and TV businesses, and we continue to see little prospect of a rise in valuations for the time being," Credit Suisse analysts Yuan Tian and Shunsuke Tsuchiya said in a client note.
More news at the source
So more bad news but this time with a silver lining. The company expects to return to profitablity this year after 4 long years of financial losses.
Everything rests on the sales of the PS3 and the Vita.