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Sony forecasts further losses despite strong PS4 and smartphone sales

Sony forecasts further losses despite strong PS4 and smartphone sales

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Sony is back to losing ways after recording a ¥128.4 billion ($1.25 billion) net loss in its 2013 fiscal year. The Japanese tech giant's operating income was ¥26.5 billion ($257 million) off ¥7.77 trillion ($75.4 billion) in sales. Twelve months ago Sony reported a ¥43 billion net profit for 2012, its first in five years, but after these 2013 results Sony is now forecasting a second consecutive loss for the current financial year: it expects to lose ¥50 billion ($489 million) by the end of next March.

PS4 and smartphones boost Sony's revenues

Sales were up 14.3 percent year-on-year, which Sony puts down to the weakening of the yen, a "significant" increase in smartphone sales, and the launch of the PlayStation 4. The mobile and gaming divisions respectively brought in 29.6 percent and 38.5 percent more revenue than the previous year — Sony says the mobile phone business itself turned a profit, but it's joined in the mobile division by the loss-making VAIO unit. The digital camera business reported a sales decrease of 2 percent, owing to an overall contraction in the market, but sales in the home entertainment division were up with Sony highlighting the performance of "high value-added" TVs.

The overall loss is largely down to restructuring costs. Earlier this month Sony revised its earnings forecast downward after announcing various charges associated with selling off its VAIO PC business, as well as a contraction in the physical media market. The company had previously expected to make a ¥50 billion, then ¥30 billion, net profit for the year, and replaced its chief financial officer with Kenichiro Yoshida last month. Although Sony predicts its smartphones and the PS4 to continue their strong performance alongside an expected sales boost from 4K TVs, the company plans further restructuring this year.

CEO and president Kazuo Hirai is set to announce Sony's long-term strategy at a May 22nd briefing. His "One Sony" restructuring plan has so far focused on shoring up the company's gaming, imaging, and mobile businesses; attempting to revitalize the ailing TV division; and expanding into the medical sector. Earlier this week it was reported that Sony would concentrate on producing 4K LCD TV sets rather than more expensive OLED panels. The company also plans to get into cloud services in a big way this year with the launch of PlayStation Now and a new TV platform.