Sony shares drop by about 7 percent after it forecasted its second consecutive year of losses.
The stocks went down after the Japanese electronics giant reported their loss at about 125 billion yen or $1.3 billion from January to March this year. The loss can be attributed to their move to pull out from the PC business.
But investors were shocked when Sony announced that it also expects to lose around 50 billion yen or $493 million for the fiscal year of 2014. Even the company’s executives have chosen to let go of their bonuses due to Sony’s loses and weak results.
These loses put renewed and heavier pressure to Sony’s Chief Executive Kazuro Hirai, who two years ago, committed to bringing back the underperforming giant electronic company back to profit.
The company is in constant battle to turn its television unit to a very profitable venture, especially because it has been losing income due of the stiff competition from its rivals in Asia like Samsung Electronics.
One of the major reasons for the decrease in shares is the selling of their PC business. Sony got out of the PC business by selling its Vaio brand to its Japanese Industrial Partners this year as part of the company’s restructuring strategies.
Besides exiting the PC business, Sony also announced that it would cut off some 5,000 jobs. The company also sold their US headquarters and its share in the Sky Perfect JSAT Holdings, the giant Japanese Satellite broadcaster.
According to the company’s chief financial officer Kenichiro Yoshida, their move to bow out from some of their businesses was a sensible decision for Sony.
He said that in the past several years, restructuring was done within its business units and in Sony’s manufacturing, but now, they are quitting entire businesses.