Sony Now Sees Wider Loss For Full Year On Impairment Charges; Scraps Dividend

(RTTNews) - Japanese consumer electronics company Sony Corp. (SON.L, SNE) said it now sees significantly wider loss than previously expected in its fiscal year ending March 31, 2015, due to the impairment of goodwill in the mobile communications segment. Meanwhile, the firm maintained its sales forecast. Citing the downward revision, Sony has determined not to pay interim dividend or year-end dividend for the year.

In its statement, Sony stated that it will record an impairment charge of approximately 180 billion yen in the Mobile Communications segment in the second quarter, as a result of revising the segment's Mid-Range Plan or MRP.

The company now expects annual net loss attributable to stockholders of 230 billion yen, compared to prior estimate of loss of 50 billion yen. Annual operating loss is now expected to be 40 billion yen, compared to previous outlook of operating income of 140 billion yen.

In the prior year, the company's net loss was 128.4 billion yen, and operating income was 26.5 billion yen.

Loss before income taxes is now projected to be 50 billion yen, compared to previously expected income of 130 billion yen, and last year's income of 25.7 billion yen.

Meanwhile, Sony maintained its forecast for sales and operating revenue to be 7.800 trillion yen for fiscal year, a growth of 0.4 percent from last year's recorded sales of 7.767 trillion yen.

It was in July this year that Sony began a review of its MRP for the Mobile Communications or MC segment in light of the historical results and the surrounding operating environment, and has revised the MRP.

The new MRP was modified to address the significant change in the market and competitive environment of the mobile business, while the previous MRP was focused principally on achieving significant sales growth.

Sony noted that this new MRP reflects lower expected future cash flows compared to the previous MRP. As a result, the firm determined that the fair value of the MC business has decreased, and would record the impairment charge.

MRP, the overarching strategy for the MC segment, has been revised to reduce risk and volatility, and to deliver more stable profits, the company noted.

In 2013, the company paid interim dividend and year-end dividend of 12.50 yen per share each.

In Japan, Sony shares lost 39.50 yen or 1.83 percent today, and settled at 2,123.50 yen.