Sony (SNE) Plunges on $4.41B Non-Cash Charge
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Over the weekend, Sony Corp. (NYSE: SNE) issued an update to its forecast which included estimates for the March 11th earthquake as well as a charge for valuation against certain deferred tax assets in Japan. The charge will result in Sony posting a FY10 loss of ¥260 billion (about $3.18 billion), from a prior estimate of ¥70 billion ($857.1 million) profit.
The revised outlook stems from a non-cash charge of about ¥360 billion (about $4.41 billion) in the fourth quarter, which Sony notes was "to establish a valuation allowance against certain deferred tax assets in Japan." The company said consolidated sales and operating revs are expected to be in-line with its February forecast.
Looking to FY11, "sales are expected to increase year-on-year, operating income is expected to be flat year-on-year, and net income attributable to Sony Corporation’s stockholders is expected to be positive," despite impact from the March 11th earthquake.
Sony sees an impact from the earthquake at about ¥17 billion ($208.2 million) in FY11 and ¥150 billion ($1.84 billion) in FY12.
Sales in FY10 are now revised downward about 0.3 percent, from ¥7.2 trillion to ¥7.181 trillion (about $87.9 billion). Net income before taxes in FY10 was nudged up about 3 percent from ¥200 to ¥205 billion.
The announcement was made ahead of its earnings report, expected out before the market opens on Thursday. Analysts are expecting EPS of $0.99 and revs of $85.97 billion.
Though a charge may have been expected by investors, the size of this charge was still a little cloudy. Sony has been hampered by supply chain disruptions, software hacking and a flailing TV business.
Sony stock is trading 3.7 percent lower Monday morning.
The revised outlook stems from a non-cash charge of about ¥360 billion (about $4.41 billion) in the fourth quarter, which Sony notes was "to establish a valuation allowance against certain deferred tax assets in Japan." The company said consolidated sales and operating revs are expected to be in-line with its February forecast.
Looking to FY11, "sales are expected to increase year-on-year, operating income is expected to be flat year-on-year, and net income attributable to Sony Corporation’s stockholders is expected to be positive," despite impact from the March 11th earthquake.
Sony sees an impact from the earthquake at about ¥17 billion ($208.2 million) in FY11 and ¥150 billion ($1.84 billion) in FY12.
Sales in FY10 are now revised downward about 0.3 percent, from ¥7.2 trillion to ¥7.181 trillion (about $87.9 billion). Net income before taxes in FY10 was nudged up about 3 percent from ¥200 to ¥205 billion.
The announcement was made ahead of its earnings report, expected out before the market opens on Thursday. Analysts are expecting EPS of $0.99 and revs of $85.97 billion.
Though a charge may have been expected by investors, the size of this charge was still a little cloudy. Sony has been hampered by supply chain disruptions, software hacking and a flailing TV business.
Sony stock is trading 3.7 percent lower Monday morning.
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