Sony Now Expecting Much Worse Results for Fiscal Year Ending March 31, 2012
Sony has revised its current estimate for the results of the financial year ended March 31, 2012. The new estimate (coming after the end of the period in question) is dramatically lower than the forecast Sony released on February 2, 2012. The big problem is an aggregate tax expense of around ¥300 billion (around $3.7 billion), that results from the company adhering to U.S. Generally Accepted Accounting Principles. Sony tries to make GAAP sound scary, but it's important to ensure that companies working with U.S. markets report their financials on a comparable basis. Really, this reflects poor performance, particularly in the company's U.S. electronics business, and the manner in which Sony chooses to treat intercompany transactions. As Sony points out, this result will not impact the company's cash flow, but is still a significant valuation issue. Unsurprisingly, unsubstantiated rumors concerning massive Sony job losses are now circulating.