Sony shares nosedive on huge annual loss

Japan’s electronics giant, Sony Corporation, has projected an annual loss of USD6.4 billion after taking a charge to write down deferred tax assets. Sony shares plunged in Tokyo on Tuesday as the company recorded the huge loss for the past fiscal year. The expected loss for the fiscal year, which ended March 31, is more than double the figure forecast by Sony in February, the company said in a statement. The loss underscores the challenge for Kazuo Hirai, the 51-year-old president of Tokyo-based Sony, in turning around the company that set the trend in electronics during the 1980s with products like the Walkman music player. Hirai, who succeeded Howard Stringer this month, has said he will close less-competitive businesses and cut costs to revive Sony. The company predicted operating profit of $2.21 billion for the fiscal year that began this month. Before the announcement on Tuesday, Sony, maker of Vaio computers and PlayStation, fell 3.5 percent, to 1,586 yen, in Tokyo, with 81.42 yen equaling $1, its lowest level since Feb. 15. The shares have gained 15 percent this year after slumping 53 percent last year. In New York trading, Sony's American depositary receipts fell $1.86, or 9.25 percent, to $18.24. The cost of insuring Sony's debt against default has climbed 9 basis points, or hundredths of a percentage point, to 199, as of around 5:15 p.m. in Tokyo, according to the data provider CMA. That is the highest level since March 23, CMA prices in Tokyo show. Sony plans to take a charge of about $3.68 billion for writing down the value of deferred tax assets, predominantly in the United States, according to the company statement. The loss is the worst for Sony since it was founded in 1946 as Tokyo Telecommunications Engineering Corp., according to Mami Imada, a spokeswoman. Including Tuesday's announcement of the $6.4 billion loss, Sony has shed a total of $11.29 billion the past four years.