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A man plays a game on Sony Corp's PlayStation 3 game console at an electronic store in Tokyo April 27, 2011. (YURIKO NAKAO/REUTERS)
A man plays a game on Sony Corp's PlayStation 3 game console at an electronic store in Tokyo April 27, 2011. (YURIKO NAKAO/REUTERS)

Sony forecasts return to modest profit Add to ...

Sony forecast it would return to a modest net profit this year after suffering its worst loss in 16 years in the wake of Japan's devastating earthquake and tsunami.

The forecast profit of ¥80-billion ($978-million U.S.), issued by the technology group on Thursday, was more cautious than analysts had expected even after the disaster, which disrupted supply networks across industries including semiconductors and cars.

Many of Sony's rivals have put off issuing forecasts altogether, citing uncertainties over when they might be able to return to normal production.

On Monday Sony disclosed a ¥260-billion net loss for the accounting year that ended on March 31 - its third net loss in as many years and the biggest under Sir Howard Stringer, chief executive since 2005.

The immediate cause was a ¥360-billion write-off of deferred tax credits - a technical accounting issue, but one that highlighted shrinking confidence in the outlook for Sony's profitability. The credits have value only if Sony can be sure that it will swiftly recover from its recent losses and earn taxable income in Japan.

Masaru Kato, Sony's chief financial officer, said it was likely the company would lose money producing and selling televisions for the eighth straight year. Stopping losses at the division has been a key goal of a restructuring led by Sir Howard, in which he has sold or closed some TV plants and outsourced more production to places such as Taiwan.

"It won't be easy to have an environment where we can achieve a return to profit," Mr Kato said.

Sony had previously said it expected profits at the operating level to be flat compared with last year at ¥200-billion. It said the figure would likely have been ¥150-billion higher had it not been for the quake and tsunami.

Electronics industry analysts had expected Sony to earn a net profit of around ¥110-billion-¥115-billion.

The company suffered the additional blow of an attack by computer hackers last month on its PlayStation Network video game platform and other internet-based services, in which personal information belonging to 100 million users was exposed to theft. Sony on Wednesday admitted the battle with hackers is spreading, acknowledged three new attacks in which customers in Canada, Thailand and Indonesia had their personal information targeted.

The Japanese group reiterated that it expected the security breach to cost it ¥14-billion this year.

In spite of problems with the gaming network, Sony said it expected to sell 15 million PlayStation3 video game consoles in the current fiscal year, up from 14.3 million last year. Sales of handheld PlayStation Portable machines are likely to drop from 8 million to 6 million as customers await a new version of the device that Sony hopes to launch at the end of the year.

Sony expects group-wide sales revenue to increase 4.4 per cent this year.

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