Jeremy Hobson: In Japan, two big electronics companies are reporting disappointing earnings this morning. Sony is reporting a $316 million quarterly loss. And Sharp announced a $1.2 billion dollar loss, which was much worse than expected.
To help explain what's going on we're joined from Tokyo by the BBC's Mariko Oi. Good morning.
Mariko Oi: Good morning.
Hobson: Well, let’s start with Sony reporting another loss and this time it’s probably a little more to blame the aftereffects of the tsunami, right?
Oi: Indeed, the company has been having quite a few challenges; its TV business isn’t doing too well, other bits and pieces not being profitable. So even though the company has a new CEO, who has said that he is committed to turning around the business, the company said it would be making less money than it originally hoped. But because the company had its record loss of almost $6 billion last year, I guess, if the company manages to make even a small profit it could be considered a turnaround.
Hobson: Well, it’s not just Sony though, there’s also Sharp reporting a real drop in earnings today.
Oi: That’s right Sharp is posting a huge loss. It also said it is going to cut 5000 jobs for the first time in more than five decades. Sony has also been cutting thousands of jobs. Japanese electronics companies haven’t really been able to keep up with the competition in all kinds of areas including TV’s, smartphones and other areas.
Hobson: Well, and I know that both Sony and Sharp are also blaming the strength of the Japanese yen which, of course, the Japanese government has tried to deal with to try to weaken the yen so that exports can grow a little bit more. Why hasn’t that worked?
Oi: Well, I guess investors continue to love buying the Japanese yen. They see it safer than say compared to the euro. That’s really bad news especially for Sony because Sony gets about a fifth of its revenue from Europe. So the strength of the Japanese yen against the euro has been particularly bad news for them.
Hobson: The BBC’s Mariko Oi in Tokyo, thanks a lot.
Oi: Thank you!