cJapan’s largest exporter of consumer electronics, forecast earnings below analysts’ estimates after the nation’s record earthquake crippled factories and hackers invaded its online entertainment services.
Operating income in the 12 months ending March 2012 will be similar to the 200 billion yen ($2.5 billion) last fiscal year, the Tokyo-based company said in a preliminary earnings statement today. The forecast missed the 254.7 billion yen average of nine analyst estimates compiled by Bloomberg. Sony forecast net income will turn positive after a 360 billion yen tax charge led to the biggest annual loss in 16 years.
The maker of Bravia televisions is struggling to improve earnings even after restarting plants that were disrupted by Japan’s 9-magnitude temblor and ensuing power shortages. The company is trying to fully resume its PlayStation Network and Qriocity online services after an attack by hackers compromised personal information from more than 100 million user accounts.
“This may be a conservative forecast, but the operating profit level still looks much lower than expected even if you take the earthquake impact into account,” said Kazuharu Miura, a senior analyst at SMBC Nikko Securities Inc. “Sony continues to face a harsh business environment.”
Sony fell 0.5 percent to close at 2,211 yen in Tokyo trading today before the announcement. The stock has dropped 24 percent this year, more than triple the 7.5 percent decline by Japan’s benchmark Nikkei 225 Stock Average.
Quake, Hacking Costs: Sony estimates the March 11 record earthquake that hit Japan will erode operating profit by 150 billion yen this fiscal year after cutting it by 17 billion yen the previous year, the company said. The unauthorized intrusion that crippled Sony’s PlayStation network may cost the company 14 billion yen this fiscal year, it said.
The net loss was 260 billion yen in the year ended March 31, including a writedown on the value of deferred tax assets. That compares with the 76 billion yen profit average of 10 analyst estimates compiled by Bloomberg in the past month and Sony’s previous forecast for annual profit of 70 billion yen.
Revenue will likely increase this fiscal year after declining 0.5 percent to 7.18 trillion yen, Sony said. The electronics maker is set to disclose financial details May 26 in Tokyo. The company may also disclose this fiscal year’s forecast.
PlayStation Hack: Sony was expected to forecast net income of 116.6 billion yen for the year started April 1, according to the average estimate compiled by Bloomberg. Sales may total 7.18 trillion yen, according to the estimates.
On May 20, Sony Financial Holdings Inc. (8729), the insurance and banking arm of Sony, reported a 13 percent decline in annual net income to 41.7 billion yen. The company forecast net income will fall 31 percent to 29 billion yen this fiscal year.
The maker of PlayStation game consoles was attacked between April 16 and April 19 by hackers who may have gained information on 101.6 million users of Sony’s online services for games, music and films.
Sony started resuming PlayStation Network and Qriocity entertainment services in the U.S. and other regions excluding Japan and Asia on May 15, more than three weeks after it suspended services following an attack on its network.
The company is offering U.S. customers of the PlayStation Network and Qriocity a year of free identity-theft monitoring along with $1 million insurance coverage per user. Earlier this month, Sony Chairman Howard Stringer apologized for last month’s incursion by hackers.
Nine Sony electronics factories in northeastern Japan that had been disrupted by the natural disaster in March have resumed operations, the company said April 28. Other plants had to curtail production because of material and component shortages.