Sony Forecasts Wider Full-Year Loss of $2.15 Billion
Sony says it will not pay a dividend for the first time in its history as its stock drops
Sony Corp. predicted a $2.15 billion (￥230 billion) full-year loss Wednesday, which is a wider loss than previously forecast, due to a writedown on the value of its mobile communications business.
Sony also announced that it would cancel its interim and full-year dividends for the current fiscal year, which ends in March. This marks the first time since the company went public in 1958 that it will not make a dividend payment to shareholders.
The stock dropped more than 6 percent in early Wednesday trading in the U.S.
Increasingly tough competition in the mobile phone market has seen Sony continuing to miss sales and profit targets. The estimated value of the entire mobile operation has been revised downward in Wednesday's announcement.
About 1,000 staff, or seven percent of the workforce, will be cut from the mobile communications operations. In July, the entertainment and electronics conglomerate had forecast a $500 million loss for the year to March 2014.
Sony had been predicting operating income of $1.31 billion (￥140 billion) but has revised that to a deficit of $373 million (￥40 billion).
"I'd like to express my deep regret to shareholders, and as president, I take this very seriously," said Sony president and CEO Kaz Hirai at a hastily-arranged press conference at Sony's headquarters in Tokyo.
Sept 17, 01.45 a.m. Updated with information from the press conference.