Stringer Tested As Sony Loss Gets Ugly

Sony Thursday reported it lost about $1 billion in the fiscal year ended March 31. It also predicted that it would continue to lose money in the current year and suffer a net loss of about $1.26 billion. Sony had previously said it would eliminate 16,000 jobs and close five factories by March 2010. On Thursday it upped that number to include three plants in Japan that will close by the end of 2009.

The crux of the matter may be what one analyst calls a problem with "No. 1s" -- Sony no longer dominates in any one particular product category. According to Sony, its sales have declined in all of its dominant markets, with overall sales falling by 20 percent year over year in the U.S., 14 percent in Japan and 17 percent in Europe.

Electronics sales, traditionally Sony's powerhouse, haven't been spared, falling 17 percent worldwide in the past year. Specialty devices like Sony's eBook Reader and video game consoles like its PlayStation 3 have also been stymied by flashier competitors from the likes of Amazon and Nintendo as well as high prices, and there's no relief for LCD TVs, a market that is expected to remain flat in 2009.

Sony argued Thursday that much of its decline came from the appreciation of the yen coupled with a plummeting Japanese stock market. That figure encouraged some analysts, along with the fact that back in a January forecast, Sony warned of a $2.7 billion operating loss, worse than the actual numbers it reported Thursday.

"Their outlook gave me the impression that their business is heading for a gradual recovery," said Fujio Ando, an analyst with Chibagin Asset Management, to BBC News. "It would all depend on whether they would be able to start producing popular products, because right now they have no 'No. 1' products."

Stringer, who assumed stewardship of Sony in 2005, added President to his title in an April 1 executive shuffling that moved former President Ryobi Chubachi to a vice chairman role. At the time he announced those changes in late February, he told reporters that Sony faced challenges from two major fronts: the global downturn and the fact that "new competitors are springing out everywhere."

Six weeks into its new fiscal year, the company said Thursday that more restructuring is on the way.

"As far as the restructuring measures go, it's not that we're doing anything that different," said Sony CFO Nobuyuki Oneda to The Wall Street Journal. "We are just going one more step."