Sony's first loss since 1995: ¥100 billion

Sony Corp. is expected to post a consolidated operating loss of about ¥100 billion for the year to March 31, its first loss since 1995, sources said Tuesday.

The projected loss, stemming from a strong yen and sluggish sales of flat-screen TVs and other products, marks a major turnaround from a projection last October of an operating profit of ¥200 billion.

The major electronics maker is forecast to log its first operating loss in 14 years despite recently announcing 16,000 job cuts and other drastic restructuring plans.

The dismal forecast for Sony shows the severity of earnings deterioration at Japan's major export-oriented firms in the reeling global economy.

The nation's top automaker, Toyota Motor Corp., is expecting in fiscal 2008 to post its first operating loss on record, while electronics giant Toshiba Corp. is likely to incur its first operating loss in seven years due to its slumping semiconductor business.

Sony had originally projected ¥520 billion in operating profit for fiscal 2008, but due to worsening business conditions it lowered the projection to ¥470 billion in July and then to ¥200 billion in October.

Sony's projection of a loss could make the already bad job market even worse, mainly in the electronics industry, the sources said, adding that if the firm's business conditions deteriorate further, it may be forced to implement additional restructuring plans.

Its mainstay electronics division is suffering from falling prices and sluggish sales of liquid crystal display TVs and other products, mainly in the United States and Europe, as the global economic downturn erodes demand, the sources said.

Sony may also face a rise in its projected operating loss if the yen continues to rise against the dollar and other currencies, the sources said.

The company enjoyed brisk earnings in fiscal 2007, reporting record-high group net profit and sales. Its operating profit for that year expanded more than fivefold to ¥374.48 billion.

Sony had planned to boost its profit further in fiscal 2008 by turning around its loss-making TV operations.

The firm is particularly vulnerable to the strong yen, as about 80 percent of its sales come from overseas.

Sony had been counting on strong holiday sales in the U.S. and Europe, but consumers have been spending less as the worldwide economy falters.