Sony (NYSE:SNE), the ailing Japanese consumer electronics company, warned that its expected annual net loss will be nearly five times as big as initially predicted, topping $2 billion. The company's American Depositary Receipts fell in New York trading.
The Tokyo-based company said today it would report a wider full-year loss of 230 billion yen ($2.1 billion) because it was writing down the value of its faltering smartphone business.
Chief Executive Officer Kazuo Hirai been working to turn around Sony by emphasizing entertainment and game content, consoles and mobile devices as demand for televisions and compact cameras has declined. With the Xperia smartphone lineup struggling, his other options for reviving the company are Hollywood movies, music and the PlayStation video-game business.
Sony ADRs dropped 6.8 percent to $18.87 at 10.19 a.m. in New York.
Sony is taking a 180 billion-yen impairment charge because it expects less cash from the smartphone business, according to a company statement. It’s cutting about 1,000 workers from the 7,100-person unit and reducing the number of mid-range models as Chinese manufacturers gain global market share, Hirai said in a briefing.
"With regards to competition, while there are many forces at play, one of them is Chinese smartphone makers who, especially within the Chinese market, are dramatically breaking through,” Hirai said.
The Japanese electronics giant also said it wouldn't pay a dividend in the current fiscal year for the first time since the company's stock was listed in 1958.