Sony Confirms Heavy Overall Losses

Partially confirming this week's expectations from the Japanese analyst community, electronics giant Sony has posted its highest quarterly loss since 2003, for the fiscal quarter ending March 31, 2007. Though the company's general performance was in line with projections, Sony still managed to beat analysts' estimates on all fronts. Quarterly losses totalled 67.6 billion yen ($US561 million), up only 2% year over year as compared to the 14% estimated increase. Revenues rose 13% year over year to 2.09 trillion yen (US$17.4 billion), beating the 9.5% increase estimate. Much of the company's current financial shortfall was cited as resulting from high costs and lower than expected sales of PlayStation 3, despite strong performance from the electronics unit and its Bravia television sets, and Sony Pictures with its successful film Spider-Man 3. Bringing Sony to positive profit margins is a prime goal of CEO Howard Stringer (pictured left), who has set a target of a 5% company-wide margin by March 2008. Stringer is currently managing a Sony in a nearly reversed financial situation than it has seen in the last several years, when the corporation was being largely carried by its successful PlayStation unit despite poorer performance from other divisions. The CEO will face challenges in making PS3 a contributor to his profitability target; many analysts believe that a price drop will be necessary to stimulate necessary sales, but the machine is already being sold significantly under cost.