Last week Sony (NYSE:
) announced that it planned to hold an event on Wednesday,
February 20 to discuss the
of the PlayStation business. There has been a lot of
regarding what the "future" might involve, but many are hoping
that Sony will provide the first concrete details for PlayStation
4. If so, this could pave the way for a full unveiling -- with
games, a price and a release date -- at the Electronic
Entertainment Expo in June.
Sony's event announcement added to the goodwill the company
had been receiving from investors; the firm rose more than 40
percent over the last three weeks. On Wednesday, Citigroup
reiterated its Buy rating
and $17.60 Price Target on the stock.
The Washington Post
, at least three analysts believed that Sony would post a 12
That was not the case, however. Early this morning Sony
reported a Q3 FY 2012 net loss of
10.8 billion-yen ($115.65 million)
. This is the company's eighth consecutive quarterly loss.
If there is any positive news to be derived from Sony's
earnings, it is that the loss is much smaller than what it
reported during the year-ago period. At that time, Sony lost 159
billion-yen ($1.69 billion).
While shares of Sony have been on the rise this year, they
took a serious beating in 2012, declining 39 percent. The company
had hoped to boost its value and offset its losses by releasing
or unveiling a number of new products, such as the first
commercially available 4K Ultra-HD television. Sony also released
the PS Vita, the company's second handheld game system.
While its 4K TV is a newer product (and retails for $24,999 --
well above the price most consumers can afford to spend on a
display), PS Vita retails for $249 and was released more than a
year ago in Japan. It arrived in North America and Europe in
Since that time, PS Vita has gone on to sell roughly 6.86
million units worldwide. (This figure is based on the
2.7 million units
Sony sold during the third quarter and the
4.16 million units
that were previously sold.) According to
, Sony estimates that it will only sell 1.3 million units during
Q4 FY 2012.
That loss is not too surprising -- after all, hardware sales
tend to be lower during the winter months than they are during
the holiday sales period. Regardless, Sony has some work to do if
it plans to turn the company around.
"Sony's earnings are really disappointing," Ichiro Takamatsu,
a fund manager at Bayview Asset Management Co., told
The Washington Post
. "It hasn't restructured its business thoroughly enough."
Sony may hope that its February event can turn things around
and show investors that the company has a roadmap back to
profitability. Consumers are surely hoping the same thing, as a
PlayStation 4 unveiling would prove to be positive for all
Even so, the road ahead will not be easy -- Nintendo (OTC:
) new console is already on the market, and Microsoft (NASDAQ:
) is expected to unveil its next gaming machine in June.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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