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Sony More Than Quadruples Loss Forecast to $2.15 Billion for Fiscal Year

Corporation cut the value of its mobile communications unit after smartphone sales suffered in the wake of increased competition

Sony Corp. drastically increased its expected losses for the current fiscal year ending March 2015, raising the figure from 50 billion yen ($488 million) to 203 billion yen, or $2.15 billion. That’s more than four times their initial estimates.

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The Japanese electronics company cut the value of its mobile communications unit after smartphones underperformed in the market, according to The Wall Street Journal. Just this past July, the electronics giant announced that the smartphone unit had posted operating losses, pushing the company to reduce its sales target for the year to 43 million handsets.

The company said that it will take a $1.76 billion impairment charge against the sagging division in the second quarter, and it will refocus its priorities. Rather than trying to grow its phone business, Sony will instead work on reducing risk in a “competitive environment,” which will mean reducing the number of models it offers.

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The phones division can now join the television set and computer divisions at the company that are proving disappointing to the bottom line. The company did have good news to tout in July, as it’s Games & Network Services division, led at least in part by the success of its Playstation 4, netted a profit of $261 million.

It also saw monetary boosts from its film division, which saw gains from $36 million in the first quarter of its 2013 fiscal year to $76 million in the first quarter of the current fiscal year.

CEO Kazuo Hirai is expected to attend a news conference on Wednesday where the company will provide further details.