Sony Hemorrhaging Money, Not Just Passwords

Posted 05/23/2011 at 11:51am | by Brad Chacos

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Like we said on Friday, Sony just can't catch a break. Japan's major earthquake devastated the company the same as it did almost every other Japanese company; then hackers kicked them (and their crappy  security systems) while they were down and brought the PlayStation network to its knees. It's been bad news after bad news since March, and the company's recently revised financial forecast shows just how hard the past few months have been to Sony's wallet.

Original forecasts pegged the company's projected income for the year at about $850 million; the new events and line items drags that number down to almost a $3.14 billion dollar loss. That's a turnaround of nearly $4 billion, a number that's sure to send investors reeling themselves. And, since the addendum only takes events up to the end of March into account, the costs associated with the PlayStation Network debacle aren't even included in that figure.

Digging into the report, Sony pins most of the blame on two events. Sony estimates the direct and indirect costs from the earthquake at approximately $551 million, and the company's also due to chalk up a $4.4 billion dollar non-cash charge to deal with Japanese tax issues.