Sony has reversed its prediction of a full-year profit, now expecting to make a net loss of ¥110 billion ($1.1 billion) in the year ending March 2014. It's the second quarter in a row that Sony has cut its guidance; the company slashed expectations to ¥30 billion from ¥50 billion in October. Sony hasn't changed its revenue forecast, however — the swing to loss is down to depreciation and amortization along with restructuring costs incurred by selling off the VAIO PC business and spinning off TVs into a separate unit. Operating income for Q3 was ¥90 billion yen ($860 million) and net profit was ¥27 billion ($257 million) off sales of ¥2.41 trillion ($23 billion).
PS4 leads 64.6 percent boost for games division
Sony has announced that it will make 5,000 layoffs by the end of the next financial year, of which 1,500 will be in Japan, as a result of the drastic measures taken with the TV and PC divisions. The cost-cutting is in line with CEO and president Kaz Hirai's outlined plan to streamline Sony's offerings, and other parts of the company had better news to report.
The games division saw a 64.6 percent boost in sales over last year, thanks to the PlayStation 4's strong launch and a weakened yen. Sony's mobile products and communications division, which included PCs until now, saw revenue increase 44.8 percent year-on-year powered by a "significant increase in unit sales of smartphones." The home entertainment and sound division saw a 24.8 percent lift in revenue on improved LCD TV sales; Sony is now splitting off its TV business as a subsidiary and will concentrate on high-end and 4K models.
'Breaking Bad' lifts entertainment revenue
The entertainment business, which has come under scrutiny over the past year, showed a 7.1 percent increase in revenue but a 4.3 percent drop in operating income. Sony called out Breaking Bad home and streaming sales as a driver of revenue for Television Productions, and Captain Phillips and Cloudy with a Chance of Meatballs 2 recorded strong box-office performance, but overall the movie division couldn't match the impact of Skyfall from the same period last year.
Update: Although Sony is spinning its TV division into a separate unit, it's unlikely to go the way of VAIO for the time being. In comments reported by Reuters, Hirai said that there are no plans to sell the TV business, claiming that running it as a subsidiary puts the company on the right track. "There are many possibilities, not just for our TV business," he said.