Sony expected to post first loss in 14 years

Written by Joe Martin

January 13, 2009 | 11:32

Tags: #credit-crunch #losses #profit #ps3 #recession

Companies: #sony

Sony is expected to announce an operating loss of over £684 million GBP for it's 2007 - 2008 financial year soon according to Nikkei, the Japanese business daily.

The loss could be set to double too, depending on inventory conditions in the first quarter of 2009, Reuters reports.

The anticipated loss goes directly against Sony's financial predictions as well, which forecast that the company would make an operating profit of £15 million GBP this year - an estimate which was down on the year before.

In preparation for the loss Sony announced back in December that it would be curbing future investments and pulling out of some businesses in order to save around £600 million GBP per year as the recession loomed. The company also announced that it would lay-off large numbers of staff from a selection of sectors. A total of 16,000 employees are expected to be laid off.

No matter how large the loss is though it'll still be only the second time that the company has operated at a loss since it went public in 1958 and the only time that it has been caused by the electronics division. The only loss the company has faced before has arisen from one-time charges in the company's film sectors back in 1995.

This time however the fault is levelled clearly at the performance of Sony's electronics sections, with the PlayStation 3 in particular racking up massive losses for the company.

Sony's shares fell by 1.5 percent yesterday in expectation for the announcement.

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