Sony May Post Biggest Loss in 4 Years on PlayStation 3 Consoles
By Hiroshi Suzuki
May 15 (Bloomberg) -- Sony Corp., the world's second-largest consumer electronics maker, may report its biggest quarterly loss in four years after the PlayStation 3 game console failed to spur as much demand as Nintendo Co.'s Wii player.
The net loss at Tokyo-based Sony may have widened to 75.8 billion yen ($630 million) in the fiscal fourth quarter ended March 31, from 66.5 billion yen a year earlier, according to the median estimate of 11 analysts surveyed by Bloomberg. Sales probably rose 9.5 percent to 2.02 trillion yen, the survey showed.
PlayStation 3 is being outsold by Wii by about two to one, causing Sony's game division, its second-largest by revenue, to post a fourth-quarter loss of 121 billion yen and a record 245 billion yen deficit for the fiscal year, according to five of the 11 analysts. The loss may exceed profits from electronics such as Bravia televisions, and the movie unit, whose ``Spider-Man 3'' generated record box-office sales when it opened this month.
``The extent of the recovery in the game business will be the main theme this fiscal year,'' said Naoki Fujiwara, who oversees $720 million at Shinkin Asset Management Co. in Tokyo.
Chief Executive Officer Howard Stringer, 65, who took over in 2005, promised to raise the company's percentage of annual operating profit, or sales minus the cost of goods sold and administrative expenses, to 5 percent of revenue by the end of March 2008. That would be the highest annual operating margin since the year ended 1999.
``This year will be the first time Stringer's management really comes under scrutiny,'' said Fujiwara.
Sony spokesman Shigenori Yoshida declined to comment for this article because the company reports earnings tomorrow.
Record Games Loss
Sony will probably fall short and generate an operating margin of 4.1 percent, according to the survey. Last fiscal year, Sony had an operating profit of 80 billion yen, or 1 percent of sales, the survey showed.
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