Sony Revises Full Year Forecast Ahead of Annual Report
May 23, 2011
Sony Corp (NYSE:SNE) revised its forecast for the full fiscal year ended March 31, 2011 today, now expecting to a report a loss of $260 billion yen, compared to its earlier forecast released in February 2011 for net profit of $70 billion yen.The company decided to set aside reserves of $360 billion yen in the quarter to cover certain deferred tax assets in Japan. The company said that three straight years of net losses, combined with the uncertain business outlook in Japan following the March 11 disaster, prompted the decision to cover the deferred tax assets, which are credits that can be used to offset taxes in future periods.The company said the natural disaster would subtract $22 billion yen from its sales and $17 billion yen from its operating profit for the year.Sony's revision comes after most Japanese companies have already reported their earnings. Sony will report its earnings for the full fiscal year this Thursday, as the company set the date later than its usual mid-May timing to spend more time determining the extent of the damage caused by the natural disaster on the company's operations.Sony has a potential upside of 34.9% based on a current price of $27.05 and an average consensus analyst price target of $36.48.