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Record Loss Predicted For Sony In Fourth Quarter
Record Loss Predicted For Sony In Fourth Quarter
May 15, 2007 | By David Jenkins

Analysts quoted in a new Bloomberg article have suggested that Sony could report its largest quarterly loss in four years this week, following lower than expected demand for the PlayStation 3, with a figure of ¥75.8 billion ($629.3m) being predicted.

The ¥75.8 billion figure has been calculated from a median estimate of eleven analysts surveyed by Bloomberg, an increase from a loss of ¥66.5 billion ($552.1m) in 2006. The same analysts predict that sales will have risen by 9.5 percent to ¥2.02 trillion ($16.77bn).

A fourth quarter loss of ¥121 billion ($1.00bn) is predicted for Sony’s game division, with a record deficit of ¥245 billion ($2.03m). The predictions contrast with what was seen as generally positive third quarter results for Sony, during which it exceeded both analyst and its own estimates.

Sony CEO Sir Howard Stringer had previously promised to raise the company’s annual operating profit to 5 percent of revenue by the end of March 2008, although analysts now predict that only a figure of 4.1 percent will be reached.

"The 5 percent margin target is reachable if there is no price cut in the PS3," quotes Bloomberg of Hitoshi Kuriyama, an analyst at Merrill Lynch Japan Securities. "But I'm expecting a 20 percent price cut this fiscal year, and if that happens, the margin will not reach 5 percent."

Sony’s official results for its fourth quarter and full financial year are expected later this week.

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