As we all become accustomed to hearing about companies struggling and reducing costs by laying off workers, tech juggernaut Sony is expected to to post its first loss since 1995, Japanese sources report.
The Japanese yen's steep appreciation and Sony's struggling sales both in Japan and abroad are a few reasons why Sony is expected to post its first loss in 14 years. Sony previously expected 520 billion yen operating profit in 2008, but the projection was lowered down to 470 billion yen in July, then was dropped to just 200 billion a few months ago.
Three months ago, Sony revised its business results for the fiscal year, with profits down 200 billion yen, a whopping 58 percent lower than 2007. Unnamed sources said Sony's operating losses will top 100 billion yen, as consumer spending on LCD TVs, digital cameras and other electronics has dropped because of the struggling economy.
Sony's LCD TV market is being hit especially hard in the United States and Europe, with consumers electing to save money rather than purchase new electronics.
It could get worse for Sony in the future if the yen continues to rise when compared to the U.S. dollar and other major global currencies.
Sony's struggles highlight the overall turbulent Japanese economy that has been on a bumpy ride over the past 15 months. Japanese exports dropped more than 26 percent and imports dipped 13 percent, the Japanese Finance Ministry announced earlier in the week. Other Japanese technology manufacturers have also suffered due to the weak economy and unpredictable yen rates.
