Sony posts $312M Q1 loss as restructuring costs hit home
Despite higher sales, Sony's fiscal first quarter results show the technology giant still facing pressure in some key areas.
Sony's fiscal first-quarter results saw the company hit with a slide in operating profit, as restructuring charges took a bite out of its bottom line.
The net loss for Sony widened in the quarter to 24.6 billion yen ($312m) from to 15.5 billion yen ($200m) a year ago. The company also reported a year-on-year fall in its first-quarter operating income, dropping 77 percent to $80.3 million. The slide was larger than expected, with analysts having predicted a decrease of around 35 percent, according to Reuters.
The decline came as a result of increased restructuring charges and unfavorable foreign exchange rates, as well as a drop in the performance of its mobile unit.
However, Sony's sales rose slightly year-on-year, up 1.4 percent to $19.2 billion.
Sales increased 133 percent year-on-year to $3.6 billion in Sony's mobile products and communications unit, with the gains largely coming from the fact that mobile division wasn't fully a part of Sony a year ago. Earlier this year, Sony broke up the Sony Ericssion cellphone joint venture and took full control of the unit. Had the phone division been a part of Sony a year ago, sales would have only increased 14 percent.
Nevertheless, the consolidation of mobile resulted in $143 million in restructuring costs for the company, and the unit as a whole finished the quarter with a $356 million loss.
Falling sales of the PlayStation 3 and PSP handheld console, although partially offset by PlayStation Vita sales, led to a $45 million loss for Sony's Game unit.
The company's home entertainment and sound unit posted a $126 million loss over the quarter, which Sony attributed to "a decrease in selling, general and administrative expenses, partially offset by the unfavorable impact of... lower sales of LCD televisions."
Sony gained a new chief executive, Kazuo Hirai, earlier this year when the previous holder of the position, Howard Stringer, stepped down after years of poor performance and a fall in profit.
In April, Sony said it would cut around 10,000 jobs and spend upwards of $1 billion on "urgent" restructuring to get the company back in the game.