Sony Corp. on Wednesday slashed its full-year operating profit outlook by 90 per cent to its lowest level in three years as Thai floods disrupt camera production at the Japanese company, which is already struggling with a soaring yen and sluggish television sales in the U.S. and Europe.
Sony blamed the deluge in Thailand for cutting ¥25-billion in expected earnings and reduced its forecast for TV sales by almost a 10th to 20 million sets.
Sony, which is heading for its eighth straight annual loss in its TV division, is revamping the unit, but a lack of details since the plan was announced three months ago and poor sales are keeping investors downbeat.
It said earlier this week that it would split its television business into three divisions of outsourcing, LCD TVs and next-generation TVs from Nov. 1 in its latest attempt to turn around the loss-making operation.
Sony is also considering dissolving its flat-screen venture with Samsung Electronics Co., which will enable it to cut panel supply costs and improve its TV business earnings, according to sources familiar with the matter. It has yet, however, to unveil any plan.
The revised forecast of ¥20-billion ($255-million U.S.) for the year ending in March compares with its previous estimate of ¥200-billion in profit and market expectations of a ¥166-billion profit in a Thomson Reuters I/B/E/S poll of 20 analysts.
On a net basis, Sony cut its forecast to a loss of ¥90-billion, from its previous forecast for a net profit of ¥60-billion.
Once a symbol of Japan's high-tech might, Sony is struggling to come up with hit devices and finds itself outmanoeuvred in TVs by Samsung Electronics and in the booming smartphone market by Apple Inc.
Sony is yet another addition to a lengthening list of Japanese firms that have posted poor quarterly results due to factors including the strong yen, floods in Thailand and weak demand in the United States and Europe.
The list includes names such as Honda Motor Co. , Panasonic Corp. , Nintendo Co. Ltd. and Nomura Holdings
The maker of PlayStation games machines and Bravia televisions posted an operating loss of ¥1.6-billion for the July-September period, versus market expectations of a ¥40-billion profit and a ¥68.7-billion profit a year earlier.
Shares of Sony tumbled 3.6 per cent to ¥1,520 ahead of the results on Wednesday. Sony shares fell 46 per cent between the beginning of the year and Tuesday's close, compared with a 14-per-cent fall in the broader market.