TOKYO – Sony forecast a return to profit for this fiscal year after sinking into its third straight year of red ink, hammered by the costs of massive online security breaches and the damage from a March quake and tsunami in northeastern Japan.
Tokyo-based Sony Corp. said Thursday it expects an 80 billion yen ($975.6 million) profit for the current fiscal year, as sales recover in flat-panel TVs, games, personal computers and network services.
Sony chalked up a 259.6 billion yen ($3.2 billion) loss for the fiscal year ended March 2011, the company's biggest net loss in 16 years.
Sony's latest red ink is worse than the 40.8 billion yen loss racked up the previous year, and the 98.9 billion yen loss for the year before that.
Sony said it hopes to boost sales for the fiscal year through March 2012 by 4.4 percent to 7.5 trillion yen ($91.5 billion).
The losses recall another difficult period in Sony's history, when its bottom line was battered in 1995 by the disastrous results of its movie operations, which followed Sony's $3.4 billion purchase of Hollywood studio Columbia Pictures in 1989.
Sony, which makes the PlayStation game console and Bravia liquid-crystal display TVs, has been battling production delays and sales losses after supplier factories were damaged by the quake and tsunami.
It lowered its earnings projection earlier this week, citing a charge it must take related to damages from the disaster. It had initially expected to return to profit.
Sony also faces a new kind of challenge to its reputation after acknowledging a massive security breach affecting more than 100 million online accounts, and was forced to close down its online gaming services last month.
Sony is expecting costs related to its online security woes of 14 billion yen ($173 million), covering customer support, freebie packages, legal costs, lower sales and measures to beef up security.
It has said it has not confirmed any misuse of the possibly stolen personal information, but more security problems have popped up in recent weeks, including services in Greece and Canada.
For the January-March quarter, Sony's red ink ballooned to 388.8 billion yen ($4.7 billion) in losses from a 56.6 billion yen loss for the same period the previous year. Quarterly sales dropped 7.8 percent to 1.58 trillion yen ($19.3 billion).
Sony has stayed in the red in its core TV business for seven years straight. A strong yen, which erodes the value of overseas sales, and a decline in prices were behind the damage, despite selling more TVs, according to Sony.
Sony stock gained 0.1 percent to 2,238 yen ($27) in Tokyo, shortly before earnings were announced.
NEW DELHI (AFP) – India's finance minister said Thursday he was coordinating with other emerging countries to back a common candidate to be the next head of the International Monetary Fund (IMF).
"I am in touch with some of the finance ministers of developing countries and emerging economies... We are trying to consolidate our position where we can take a view," Pranab Mukherjee told reporters in New Delhi, according to the PTI news agency.
On Wednesday, Indian Prime Minister Manmohan Singh called on developing countries to unite behind a push to reform the global financial institution, whose head has traditionally always been a European.
IMF directors from Brazil, Russia, India, China and South Africa -- the so-called BRICS economies -- said in a declaration Tuesday that Europe's grip on the IMF leadership "undermines the legitimacy of the Fund".
French Finance Minister Christine Lagarde has emerged as front-runner for the post, receiving wide European backing, after Dominique Strauss-Kahn quit following his arrest in New York on charges of attempted rape.
India has not declared support for any candidate, but its representative at the Washington-based lender conceded Wednesday that it would be "extremely difficult" for a non-European to take the top job.
"Unless the voting shares which various countries hold in the IMF are changed to reflect the new economic realities, it is going to be extremely difficult for any non-European candidate to win the election," New Delhi's IMF representative Arvind Virmani told India's NDTV news channel.
India's top candidate for the post, Montek Singh Ahluwalia, has been ruled out because he is too old, Virmani said earlier this week.
Currently, European nations hold close to a third of the voting power at the International Monetary Fund while the United States has nearly 17 percent.
Asian nations hold around 20 percent, with the rest held by other countries.
LONDON (Reuters) – World stocks rose from a two-month low on Thursday while the euro hit a one-week peak versus the dollar, aided by higher commodities and a report on China's possible interest in "bailout" bonds for Portugal.
Gains on Wall Street overnight, ending a three-day losing streak, also encouraged investors to buy risky assets, although uncertainty over whether Greece would need to restructure its debt capped gains.
"In the wake of a Wall Street having a mildly positive session, you would expect some more of Monday's losses to be clawed back," said Jeremy Batstone-Carr, strategist at Charles Stanley.
The Financial Times quoted the head of the European Financial Stability Facility (EFSF) as saying China and other Asian investors were expected to buy a "strong proportion" of Portuguese bailout bonds when the euro zone's rescue fund starts auctioning them next month.
However, investors remain concerned about the possibility of Greek debt restructuring, uncertainty over whether Greece will agree new austerity measures and the potential for contagion into the likes of Spain and Italy.
"There are ongoing concerns about euro zone peripheral debt. We're not out of the woods by any stretch of the imagination," Batstone-Carr said.
MSCI world equity index rose 0.6 percent, bringing its gains this year to three percent. The FTSEurofirst 300 index (.FTEU3) added 0.2 percent.
Emerging stocks gained 1.2 percent.
The dollar (.DXY) fell half a percent against a basket of major currencies. The euro rose 0.7 percent to $1.4186.
A weaker dollar helped U.S. crude oil rise a quarter percent to $101.60 a barrel. Brent crude added 0.2 percent to $115.12 a barrel.
Underlying strong commodities demand, the Baltic Dry Index (.BADI), which tracks rates to ship dry commodities, rose to its highest level in seven weeks on Wednesday.
GREEK YIELDS RISE
The Greek government is scrambling to resolve a stand-off with its opposition over austerity measures and Greece's EU commissioner warned on Wednesday that its euro membership was at risk if it failed to agree to sacrifices.
Greek two-year yields rose 43 basis points to 26.9 percent but the premium investors demand to hold Spanish and Italian government bonds rather than benchmark German Bunds fell after the FT report on China.
The EFSF will hold its first auction to raise funds for the recently-approved 78 billion euro Portuguese bailout in mid-June.
"We know central banks are buying a lot of this kind of paper, it's just a bit of positive news amongst all the noise on Greece," said a trader.
"But there seems to be growing political dissent on further bailouts so it's really down to Greece to get their house in order."
(Additional reporting by Blaise Robinson, editing by Mike Peacock)