Sony Suffers First Annual Loss in 14 Years

Facing more losses ahead, Sony said that it would close three factories in Japan, part of a continuing effort to trim production costs and rebuild a business that has been ravaged by the sharp cutback in consumer spending throughout the world.

Sony expects to book a net loss of ¥120 billion, or $1.26 billion, in the business year ending in March 2010, after a loss of ¥98.9 billion in the year that just concluded.

That shortfall, while substantial, beat Sony’s forecast of a ¥150 billion loss, partly because of a one-time gain from a change in Japanese tax laws.

Like other Japanese exporters, Sony is reeling from a decline in sales overseas, as well as in Japan, which is mired in its worst recession in decades. A stronger yen, which erodes overseas revenue and inflates production costs at home, has also weighed heavily on its bottom line.