Sony forecasts £1.3bn losses due to mobile business woes

<p>Electronics giant Sony has revealed its annual loss may be much larger than anticipated.</p>

Japanese electronics giant Sony has revealed its annual loss may be four times larger than what it anticipated in its previous earning forecast.

Sony's chief executive officer, Kazuo Hirai, also announced the company would cut 15 per cent of the staff in its mobile division, which is struggling against giants such as Samsung Electronics and Apple.

Sales of high-end mobile device from Sony, Xperia, suffered from the absence of agreements with operators in the USmarket, where the smartphone is only available from the fourth operator T-Mobile US.

The company also unveiled a further downward revision of its earnings forecast, with the firm now expecting a full-year loss of 230 billion yen (£1.3 billion) compared with a previous estimate of 50 billion yen.

In addition, Sony will not pay a dividend this year, for the first time since listing in 1958.

In a statement, Sony said its latest plan had been "modified to address the significant change in the market and competitive environment of the mobile business."

This is the sixth profit warning from the company, which made the announcement after Japanese stock markets had closed.

Sony blamed the “competitive environment” of the mobile business and said a strategy review was needed to reduce “risk and volatility”, adding that it would adopt a new strategy aiming to reduce risk and deliver stable profits rather than focusing mainly on sales growth.

Analysts expect Kazuo Hirai, chief executive, to launch new measures including streamlining of product line-up and a change in geographical focus at a news conference later today (September 17th), the Financial Times reports.

Over the past five years Sony’s shares have lost 23.8 per cent of their value. They fell 1.8 per cent in Tokyo today.

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