Sony cuts profit projection by 70pc

1 May 2014

Electronics company Sony has cut its operating profit projection by 70pc from an initial estimate profit of 80bn yen (€564m) to 26bn yen (€183m).

Sony said it made the move as part of its provisional consolidated forecast prior to releasing full details of its finances on 14 May.

The figure relates to the Japanese company’s financial year end on 31 March this year.

Sony has attributed its change in fortune down to its exit from the PC market, which the company expects will add an additional US$300m (€216m) in costs.

Sony largely expects to record writedowns for its excess PC components in inventory and pay out to compensate the suppliers for unused components ordered for Sony’s spring PC line-up.

This would take the company’s total net losses to an estimated 130bn yen (€916m), which also marks a change to its previous estimate of a net loss of 110bn yen (€775m).

Further costs are expected to occur from Sony’s overseas disc manufacturing, which it attributes to “demand for physical media contracting faster than anticipated, mainly in the European region.” Sony estimated this will cost the company 25bn yen (€176m).

Colm Gorey was a senior journalist with Silicon Republic