As if new Sony (NYSE:SNE) CEO Kazuo Hirai wasn’t having a hot enough trial by fire, the flame turned up — a lot — on Tuesday morning. The ailing consumer electronics company, which Hirai took charge of in April from former CEO Howard Stringer, announced that its projected fiscal fourth-quarter loss is now double what it had earlier forecast. Thanks to a huge tax charge, Sony now estimates it’ll bleed some $6.4 billion (520 billion yen) in the quarter ending March 30.
With media reports saying yesterday that Sony is planning to lay off 10,000 employees, the timing of the latest bombshell could hardly have been worse. Or, perhaps Hirai is trying to get it all out there as quickly as possible, figuring expectations can barely get any lower at this point.
Investors weren’t seeing any light, however. Sony’s American Depositary Receipts were trading down nearly 10% at midday near $18.20, with Sony’s 52-week low of $16.16 coming into view.
As Reuters points out, Sony isn’t alone on the losing side of the cutthroat consumer electronics business: “In a sign that Sony’s woes are industry-wide among Japan’s consumer electronics firms, LCD TV maker Sharp Corp [PINK:SHCAY] on Tuesday also raised its full-year net loss forecast — to 380 billion yen ($4.67 billion) from 290 billion yen.”
However, Hirai did bravely look forward and forecast an operating profit of $2.2 billion (180 billion yen) by the end of March 2013. That will greatly depend, of course, on what he can do to turn around Sony’s hugely unprofitable TV business. Analysts estimate it has lost some $10 billion over the past decade.
Hirai said he’s “prepared to take ‘painful steps’ to revive the company, insisting he would not hesitate to scale back or withdraw from businesses he deemed uncompetitive,” according to Reuters. Those steps will likely be on a bed of burning coals.