Days after the surprise announcement that Kazuo Hirai will take over from Howard Stringer as the Shogun of Sony the outfit announced that it was heading for a bigger-than-expected $2.9 billion annual loss.
This seems to indicate that Stringer might have headed to a garden full of cherry blossom, written a haiku about the futility of the PS3 and produced a sharp knife after he saw the figures being prepared. The Haiku would say:
Welsh with days numbered.
Red ink on the balance sheet
Most analysts think that Hirai might be headed in the same direction if he does not turn the company around really fast.
Reuters said that Sony posted a disappointing $1.2 billion operating loss for October-December, normally a lucrative quarter with the Christmas and year-end sales.
Some of it was caused by a strong yen and flooding in Thailand stuffed up supplies, but this is the fourth year that the company has gone into the red. To make matters worse the company cannot pry Stringer’s cold, dead hands off the steering wheel until April.
Kim Young-Chan, analyst at Shinhan Investment Corp in Seoul, was quoted by Reuters as saying it will not be easy for Sony to regain its lost ground under new leadership. Its competitiveness has sharply weakened and it has structural problems that will take years to fix.
To be fair it is not just Sony. Most Japanese IT firms are up the creek without a paddle. They can’t innovate and are not getting goods into the store that people want.
Sony kept its forecast for annual sales of 20 million LCD TVs, but trimmed the number of digital cameras and PlayStation 3 consoles it expected to sell.
Next year Sony hopes to halve its TV losses, which were 220-230 billion yen this year.