Sony prepares to report £1.3bn annual losses
Not for the first time in 2014, Sony has found itself preparing shareholders for the worst, after the Japanese tech giant admitted that its annual losses could be almost five times bigger than previously predicted.
The corporation is now expecting to report a loss of ¥230bn (£1.3bn) for the 12 months ending 31st March, 2015. The reason, it says, is due to the "competitive environment of the mobile business".
In its previous forecast, Sony had predicted a ¥50bn (£285m) loss for the year, and the jump relates to an "impairment charge" of ¥180bn (£1bn) – the full amount of "goodwill" in its mobile division.
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In a statement confirming the new forecast, Sony said: "The new MRP (Mid-Range Plan) was modified to address the significant change in the market and competitive environment of the mobile business."
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In May, we reported how Sony had revised its profit forecast to just over a tenth of its initial forecast for the 2013/14 fiscal year – an 88.7 per cent drop in operating income compared with the previous year.
The corporation's exit from the PC market and the end of the VAIO range were cited as reasons for its revision, in addition to the "demand for physical media contracting faster than anticipated in Europe".
And before that, we heard in February that Sony's TV division was to be split from the rest of the business and operated as a wholly-owned subsidiary from effect this summer, as it focuses on 4K TV.
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