Sony Net Profit Nosedives 94 Percent in Q3
Oh, the huge cost of battery recalls. Remember those exploding Sony batteries? It is exacting a heavy toll on Sony’s overall profits: a very steep 94% decline on the quarter ending in September (we call it third quarter – Q3 – but it is Sony’s second fiscal quarter).
For the July-September period, the company registered a paltry net profit of $14 million (Â¥1.7B), reflecting a huge loss from the $240 million (Â¥28.5B) it got for the same period last year.
Now that the numbers are in, Sony is counting massive losses – a $420 million (¥51B) charge for this quarter alone – mainly because of the battery problem.
But despite the debacle, company execs are optimistic that they will weather this storm that’s buffeting the Sony ship. While it lowered its 2006 profit projection by 35 percent, the company is still looking forward to a bright future.
Sony’s sales actually grew by 8.3 percent at 1.9 billion yen ($16 million) and the company’s chief financial officer calls the battery recalls a “short-term impact�.
But this is the harshest blow yet to Sony, which for the first time is headed by a non-Japanese, Sir Howard Stringer. Maybe the rank-and-file dislike a gaijin for a boss?
[Via: The New York Times]
