By ISABEL REYNOLDS, Reuters
TOKYO — Sony Corp. will post its third straight annual net loss for the year that ended in March after writing off tax credits in the wake of Japan's earthquake and tsunami, the latest in a string of grim headlines on the consumer electronics giant.
The maker of PlayStation video games, Vaio computers and Bravia TVs has been battling to recover from the March 11 disaster, and more recently, a series of security breaches on its networks that affected more than 100 million user accounts.
The annual net loss would be Sony's second-largest ever, underscoring the decline of a company once a symbol of Japan's electronic and manufacturing excellence.
"I have been skeptical about Sony for a long time. Sony has been overtaken by Apple and other companies," said Yuuki Sakurai, CEO and president of Fukoku Capital Management in Tokyo. "The management is not able to show shareholders the future of the company."
Sony has found itself outmaneuvered by Apple in portable music and Samsung Electronics in flat-screen TVs and is facing a tough fight in video games with Nintendo and Microsoft .
The firm, which previously forecast a net profit of 70 billion yen for 2010/11, surprised markets on Monday by declaring the need to update investors with revised estimates ahead of its official earnings report on Thursday.
Stock exchange rules in Tokyo require companies to notify investors if estimates for the business year are likely to be more than 30 percent higher or lower than their most recent forecast.
Sony said it now expected to post a net loss of 260 billion yen ($3.2 billion), due to a non-cash charge of around 360 billion yen related to Japanese tax credits.
Companies are allowed to carry forward tax losses for up to seven years if they can show future taxable profits are likely. But three consecutive years of net losses is considered evidence under US accounting rules, the global standard, that those credits may not be available to it.
Sony said it expected sales to rise this year and forecast a return to net profit, without elaborating.
