Analysts: Sony Faces First Consecutive Losses in Four Years

Sony Corporation is believed to be reporting its first consecutive quarterly losses in four years, due in part to production and development costs in the PlayStation range of products. Several analysts reporting to Bloomberg News expect a loss of 19.4 billion yen ($174 million USD) in the quarter ending in June, following a loss of 56.5 billion yen ($532 million USD) in the fourth quarter of the 2005 fiscal year. Among the reasons for the expected loss are the continued costs of manufacturing the PlayStation Portable handheld, as well as added R&D and development costs of new technology, such as the Blu-Ray media format, the Cell processor chip, and the next-generation PlayStation 3 that will include them both. However, other non-video game related factors also cited by the analysts included low sales of Sony's Wega televisions and declining prices of LCD displays, which Sony recently partnered with Samsung to produce. "The focus for Sony will be on the management meeting in September," said Credit Suisse First Boston analyst Koya Tabata. "Sony will need to provide a clear plan on how it will improve earnings with the Cell chip at the core of its semiconductor business." Shareholders are looking to newly appointed CEO Howard Stringer to detail a plan, most likely incorporating the PlayStation 3, to reverse Sony's fortunes. Sony's official quarterly results will be released July 28th.