Tax hit means Sony will post losses of £2bn

 
Steve Dinneen
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SONY will this week unveil its second-largest after-tax loss as it struggles to overcome the Japanese earthquake, intense competition and a massive security breach.

It is expected to post a loss of 260bn yen (£2bn) after being hit by a charge related to Japanese tax credits.

The firm, which previously forecast a net profit of 70bn yen, was obliged to revise its estimates after it became clear it would miss forecasts by more than 30 per cent.

However, it maintained its annual operating profit will still come in at 200bn yen, roughly in line with consensus. It also said it expects a return to profit next year on higher sales.

Some investors now say Sony could be “kitchen sinking”, or front-loading a spate of bad news to make later figures seem better. Its reputation was rocked after it admitted hackers had stolen information – including some credit card details – from more than 100m of its users. Its clean-up operation was also criticised when it emerged the firm waited a week before telling users about the breach.

Sony said “known costs” for the attacks were estimated at 14bn yen. Sony is targeting the end of May for fully restoring the affected networks.

Its shares fell 0.5 per cent in Tokyo yesterday to 2,211yen, with the former poster-boy of the Japanese electronics industry now having lost almost a quarter of its market value this year.