Sony’s third-quarter loss announced Thursday was its eighth consecutive one. The company had been expected to report a return to profit. That it didn’t underlines how long a road back it is proving to be for Japan’s largest consumer electronics company.
Its cachet as shoppers’ go-to brand for stylish consumer electronics devices has long passed to Apple and Samsung. Global demand for TVs, once its cash cow, is waning. Smartphones and tablets are reducing the market for compact cameras and portable game players. Sony has cut its full-year sales targets for all three.
New chief executive, Kazuo Hirai, who look over last April, is betting the company’s future on mobile with its Xperia smartphones and tablet computers, and on digital imaging for professional markets such as medical. He still hopes the company will return to profit this financial year, which would be its first such year in the past five.
With losses of $544 million in the first three quarters, that will be touch and go, even after turning round the TV business through cost-cutting and last month’s sale of the company’s New York headquarters for $1.1 billion. That deal, due to close in March, will provide a one-off $685 million gain to book.
Hirai could also sell Sony’s 25-story office building in Tokyo, reckoned to be worth another $1 billion. But what he needs most of all is a breakthrough new product that will let Sony define a new market as its famed Walkman did three decades ago. With the company’s stock selling at just eight times forward earnings — compared to Apple’s 44 times — investors aren’t betting he’ll find it.