Time For The Painful Figures

Today,  Sony announced that for the tax-year ending on the 31st of  March,  they expected to report a loss of 150bn Yen,  the first in 14 years. 

This announcement came in a revision of it's consolidated forecast for the fiscal year.

In addition to the plant closures, new measures will include cuts in executive salary and benefits,  consolidating R&D and introducing and development of early retirement programmes.  With these additional incentives,  Sony expects to yield a further 150 bn Yen in addition to the savings already identified from the initial cost-cutting moves.

Sony's TV manufacturing in Japan is currently restricted to two factories with production ceasing at one of these by June.  In addition, thirty-percent of TV design operations will be eliminated by the end of FY10.  Corporate limits on recruitment and the introduction of a early-retirement  programme will commence later this year.

This is all probably not surprising in the current economic climate, but we will undoubtedly start to find out more about other company's fortunes as we are now entering that period when some companies will be making their fourth quarter and end of FY reports.

Avid is shortly due to report its fourth quarter 2009 results.  Of course it is not prudent to speculate the results in advance, but with disposals and restructuring it could be assumed what the results might contain.

Thomson has been reported possibly being the recipient from a fund launched by the French Government designed to support small and medium-sized companies,  particularly those which the French Government consider strategic.

French newspaper Le Figaro has reported that the government has been considering using some of a $20 billion euro ($28 billion) to tie that the group over for a few weeks.  It has further been reported that Rothchilds has been appointed as bankers.

In October,  Thomson vowed to restructure or sell unprofitable businesses to support profits, increase cash and reduce debt.  Stockholders and investors had been voicing their concerns for a simpler structure and a planned termination to parts of the organization which were considered loss making.  A number of these businesses have already or in the process of being disposed of.

Once of these businesses to go was the loss-making digital film transfer lines in the Broadcast & Networks businesses.  This was sold to a Venture Capital company PARTER Capital Group in Germany.  The line contributed €6 million to third quarter 2007 revenues, but expected to have been significantly loss-making in 2008 with related restructuring costs on 2008 close to €20 Million

This year, Thomson stock has had ninety percent wiped-off its value leaving a market value of €243 million.  Thomson's bonds have been downgrade to junk status over concern its finances and the uncertain outlook.

It is a uncertain time for many business and its is only when to figures come out can we appreciate the true cost of this economic downturn.

Forbes.com   marketwatch.com