Sony Says Losses Will Reach $2 Billion

For Sony things have gone from bad to worse. The electronics company based in Japan expects to lose at least $2 billion this year partly due to it poor smartphone business.

Sony announced that it estimated it would have a loss that would reach 230 billion yen or $2.1 billion for its 2015 fiscal year end in March of 2015. The company had forecasted previously that it would loss 50 billion yen, but the new forecast is close to five times more.

Sony, for the year is expecting an operating loss of close to 40 billion yen, which is a huge plunge from the operating profit of 140 billion yen that was estimated in July.

The large loss that is expected is due entirely to huge losses in the mobile communications arm of Sony, which has faced big competition in the smartphone mid-range market.

In an attempt to turn the tide, Sony will change the division’s strategy to lower the volatility and risk and deliver profits that are more stable, said a company statement.

Rather than putting all its focus on growth, Sony will concentrate on increasing its high-end smartphones and lowering the line of models in the mid range that are offered.

Last year Sony’s loss was 128 billion yen. Kazuo Hirai the CEO at Sony has a great deal of work to do as Sony has suffered a number of years of job cuts and big losses.

Moody’s downgraded the debt rating for Sony to junk this past January.

Some of the company’s investors have demanded dramatic changes of which must have been largely ignored by the company.

Dan Leob an activist investor and manager of a hedge fund known as Third Point, pressed CEO Hirai for a restructuring plan that was much more far reaching of the entire company.

Leob even suggested that the company spin off its music and film company, but the board of directors at Sony rejected the plan Loeb had supplied.

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