Life After PCs Proves Rough For Sony, Warns Of Worse Than Expected Losses
The restructuring road Sony finds itself on after deciding to sell its VAIO brand PC business isn't without its bumps and challenges. As such, Sony has gone and revised its consolidated results forecast for its fiscal year ended March 31, 2014 to reflect a preliminary net loss of 130 billion yen (around $1,3 billion) for the 12-month period.
Even with the success Sony is having with its PlayStation 4 console, the numbers are coming in lower than expected. Sony's decision to stop selling computers is partially to blame, as the electronics maker noted about 30 billion yen (around $293 million) in additional costs related to exiting the PC business.
"Since Sony’s announcement on February 6, 2014 that it will exit the PC business, PC sales for the fiscal year ended March 31, 2014 and expected PC sales for the fiscal year ending March 31, 2015 are underperforming the February expectation," Sony stated. "Consequently, Sony expects to record write-downs for excess components in inventory and accrual of expenses to compensate suppliers for unused components ordered for Sony’s spring PC lineup. In addition, certain restructuring charges are expected to be recorded ahead of schedule."
In addition, Sony cut its full year operating profit forecast from 80 billion yen (about $780 million) to 26 billion yen (around $253 million). And if all that weren't enough, Sony faces dwindling demand for its physical media, particularly in Europe.
Sony plans to post its full fiscal year results on May 14.
Even with the success Sony is having with its PlayStation 4 console, the numbers are coming in lower than expected. Sony's decision to stop selling computers is partially to blame, as the electronics maker noted about 30 billion yen (around $293 million) in additional costs related to exiting the PC business.
"Since Sony’s announcement on February 6, 2014 that it will exit the PC business, PC sales for the fiscal year ended March 31, 2014 and expected PC sales for the fiscal year ending March 31, 2015 are underperforming the February expectation," Sony stated. "Consequently, Sony expects to record write-downs for excess components in inventory and accrual of expenses to compensate suppliers for unused components ordered for Sony’s spring PC lineup. In addition, certain restructuring charges are expected to be recorded ahead of schedule."
In addition, Sony cut its full year operating profit forecast from 80 billion yen (about $780 million) to 26 billion yen (around $253 million). And if all that weren't enough, Sony faces dwindling demand for its physical media, particularly in Europe.
Sony plans to post its full fiscal year results on May 14.
