Here continues the sad tale of Japanese electronics superpower Sony, which is feeling the weight of the world on its shoulders. Thanks to a mixture of the tragic natural disasters in Japan and a heavy tax hit, Sony has posted its financials at a $3.18 billion net loss.
The rapture may not have happened over the weekend, as predicted by some well-known oddballs, but Sony execs and shareholders will have been worried for different reasons.
Sony faced a Y360 billion tax charge for writing off deferred tax credits it held over the last two years of deficites, but the Financial Times says the credits are only worth it if Sony can earn taxable profits in Japan, which it isn’t too confident about. The tsunami and earthquake double threat in March has understandably knocked the confidence of an entire country.
We reported at the time that supply chains would be hit hard, and Sony agrees. CFO Masaru Kato said the tragedy “did major damage to our supply chain and created the risk of lasting electricity shortages.”
The unapologetic Howard Stringer, CEO, will face mounting pressure about his tenure at the top of Sony’s rank and file. It’s the third loss under Stringer’s rule.
While the mammoth attack on Playstation servers, which compromised the personal details of every user, will certainly be one of the biggest PR disasters of whatever we’re calling this decade, the real danger will be in explaining another loss to investors who expected to turn a buck.
Seppuku isn’t quite the done thing in Japan anymore. If Stringer leaves we expect it will be a polite and gracious stepping down behind the scenes.
Sony says its coffers have not run dry and that it’ll come through the mess in the end, besides, its head is above water at least at the operating level.