Sony Corporation said today that it suffered an operating loss of 20.8 billion yen ($175m) for the three months to September largely due to a mounting defective battery crisis.
The electronics giant, which reported a 74.6 billion yen in operating profit a year earlier, said it booked a 51.2 billion yen provision for the quarter 'that relates to charges expected to be incurred as a result of the battery recall'.
Its net profit for the quarter plunged 94.1% to 1.7 billion yen as it incurred a pre-tax loss of 26.1 billion yen, compared with a pre-tax profit of 95.4 billion yen for the same time last year.
Despite the battery woes, sales of its electronics products as well as revenue from its film businesses remained brisk, raising total revenue for the quarter by 8.3% to a record 1.85 trillion yen.
Sony left its full year forecast unchanged from its latest projection when it more than halved its operating profit target for the year to March 2007. The company slashed its target for operating profit to 50 billion yen from 130 billion yen as it cut its net profit target to 80 billion yen from 130 billion, but left its revenue target unchanged at 8.23 trillion yen.
Sony said that Welsh-born chief executive Howard Stringer and president Ryoji Chubachi would continue in their jobs to oversee the recall of millions of the group's laptop computer batteries.
Sony said last week that as many as 9.6 million of its batteries could now be recalled at a cost of 51 billion yen due to fears they might catch fire. It said it believed microscopic metal particles, produced in the manufacturing processes, may cause short-circuiting and overheating in the affected batteries that were produced between August 2003 and February 2006.
The troubles have hit Sony just as a painful restructuring drive had appeared to be paying off at the iconic company that brought the world the Walkman but fell behind rivals like Apple with its hit iPod music player.
