Sony issues earnings warning due to battery recall and games loss
Times are surely tough these days at Sony and things look like they’re going to get any better any time soon as they’ve announced an earnings warning due to two major factors - the enormous widely publicized laptop battery recall and a larger than expected loss in their games unit. Sony cut it’s profit outlook by approximately 62 percent and as a result, it will miss market expectations by a tremendous amount.
Sony announced that they will be setting aside approximately 51 billion yen or $429.1 million for costs associated to the battery recall. Analysts had been expecting this for some time but what they did not expect was the larger than expected loss from their games unit.
Losses from their games unit are expected to nearly double from their original estimates to 200 billion yen. Contributing to the losses are slower than expected demand for the Sony PSP, price cuts to the Sony PS3 in Japan, and a delay in the European launch of the Sony Playstation 3 until next year.
To top things off – Toshiba announced that they may seek compensation from Sony for the possible damages to its brand name and loss of potential sales due to the battery recall.
Definitely not good times at Sony these days.
Related Posts:
