ony announced Monday that it expects to post a $3.2 billion loss for the fiscal year that ended March 31, its third straight year in the red, and the company's biggest annual loss in 16 years. The company had previously projected it would make an $860 million profit, but then, in the wake of the March 11 earthquake and tsunami that devastated Japan, changed their forecast to billions in probable losses. Sony also spent $170 million in dealing with a hacking attack that brought down its PlayStation Network. Does the $3.2 billion "beating" signal even more trouble ahead for Sony — or is the company paving the way for a return to profitability?
Sony's "comeback has been derailed": The Japanese electronics giant "seems like a family that suffered the death of loved ones and then had its house burglarized while attending the funerals," says Bill Saporito in TIME. And this financial loss shows just how challenging the road will be for Sony to return to its old spot atop the tech world. Sony's management has to deal with the effects of the natural disaster while still trying to keep up with stiff competition from the likes of Apple. That's not an easy atmosphere in which to innovate.
"Sony's earthquake writeoff brings net loss to $3.2 billion"
Don't expect an imminent rebound: It "will be some time" before Sony, and its stock, bounce back, says Teresa Rivas in Barron's. Like other Japanese companies, its recovery depends at least in part "on a myriad of parts and materials suppliers," most of whom are still trying to overcome the effects of the earthquake themselves. So "much of that recovery is outside Sony's control," as is the spending habits of Japanese consumers. Sony wasn't doing particularly well even before the disaster, so it looks like "the stock will be stuck" for awhile.
"Why Sony can't hack it"
At least Sony has some decent products in the pipeline: The company will try "to regain the offensive" next month by showing off "compelling video games that can drive sales of its PlayStation 3 system and Bravia TVs," says Mike Snider in USA Today. Most critically, perhaps, the company has to restore confidence in, and lure users back to, its PlayStation Network. The company expects to lose another $1.8 billion this year, but it could be setting the stage for a strong turnaround after that.
"Sony's profit forecast turns into a $3.2 billion loss"
- How to dramatically improve your memory
- Watch SNL delightfully mess with all your childhood Christmas favorites
- Which professions have the most psychopaths?
- 32 TV shows to watch in 2013 [Updated]
- 7 grammar rules you really should pay attention to
- 7 health benefits of playing video games
- The executioners' lament
- Diagnosing the Home Alone burglars' injuries: A professional weighs in
- There is a better alternative to raising the minimum wage
- Why European women are still smoking like chimneys
Subscribe to the Week