Sony forecasts return to profit in year to March 2012

Sony has been targeted in cyber attacks involving the theft of names, passwords and addresses from more than 100 million accounts on its PlayStation Network and Sony Online Entertainment services. www.buzzle.com photo

TOKYO – Japanese electronics and entertainment giant Sony Thursday reported its third annual loss in a row after the March 11 quake, but forecast a return to the black this year despite a huge online attack.

Sony confirmed that it suffered a net loss of 259.6 billion yen ($3.2 billion) in the year to March but forecast a net profit of 80 billion yen for the fiscal year that ends in March 2012.

The maker of PlayStation consoles and Bravia televisions was forced to shutter plants in Japan after March’s twin disaster battered supply chains and damaged some of its facilities.

Since last month the firm has been targeted in cyber attacks involving the theft of names, passwords and addresses from more than 100 million accounts on its PlayStation Network and Sony Online Entertainment services.

In the quarter to March alone, it incurred a 388.8 billion yen net loss mainly due to the impact of the quake-tsunami. The company also cited a 362 billion yen non-cash charge set aside for deferred tax assets.

Sony said operating profit grew to 199.8 billion yen for the year to March from 31.8 billion yen and that it expects a similar operating profit this year.

“Sales are expected to increase year-on-year, despite the negative impact of the earthquake, primarily due to higher sales in LCD televisions … and higher sales in semiconductors,” it added.

On Monday the electronics giant said the impact of the March 11 quake on sales was estimated at 22 billion yen, while it expected to record 12 billion yen in charges related to idled plants and insurance policy previsions.

Sony also expected a 5 billion yen net margin loss associated with a decrease in sales following a post-earthquake drop in consumer demand.

Expenses related to repairs, clean-ups and damage caused by the disaster were expected to result in an 11 billion yen impact, it said, although most of this was expected to be offset by insurance.

Sony shut down its PlayStation Network and Qriocity services on April 20 as it was hit by a huge cyber attack, and said it could not rule out that millions of credit card numbers may have been compromised.

The security break led CEO Howard Stringer to apologise in a letter to customers, saying the company was “working with the FBI and other law enforcement agencies around the world to apprehend those responsible”.

Earlier this week hackers attacked Sony Ericsson’s Canadian eShop website, affecting 2,000 users while Sony sites have also been hit in Thailand, Indonesia and Greece.

On Thursday it reiterated an estimate that the initial data breach will result in at least a $170 million hit in “currently known costs” to operating profit this financial year in terms of insurance and damages.

Sony stock ended the trading day up 0.08 percent, before the results were released, after falling slightly earlier in the day.

Mizuho Securities senior analyst Ryosuke Katsura said “the market is concerned whether Sony can post profits in the segment including TV, digital cameras and semiconductors amid the negative impacts of the quake.

“But we expect the company is likely to show performance that beats market expectation mainly on its chip business,” Katsura told AFP.

“A possible downside risk is the on-going personal information leak and hacking problem, if costs to cover damages turn out to be bigger than Sony currently expects.”