Sony Reports Its First-Ever Annual Loss

Sony Corp. reported its first-ever annual loss from operations Thursday and announced that Masaaki Morita, younger brother of Sony Chairman Akio Morita, will step down as head of the company’s U.S. operations in late June.

Sony, like other Japanese electronics companies, has been hit hard by the recession, a rising yen and over-investment in new factories and product research and development.

Sony’s operating loss for the year ended March 31 was 20.52 billion yen, or $157 million, contrasted with an operating profit of 72.24 billion yen, or $555 million, for the year-earlier period.

The company said the younger Morita will be succeeded as head of Sony USA by Ken Iwaki, a deputy president of Sony Corp. and head of the company’s strategic planning group.

Masaaki Morita, who turns 65 next week, has headed Sony’s sprawling U.S. manufacturing and marketing operations--excluding its film and record businesses--since 1987. He had few direct operating responsibilities, and his departure is expected to have little immediate impact, analysts said.

A Sony spokesman said Morita, one of four deputy presidents of parent Sony Corp., is leaving because 65 is the mandatory retirement age for deputy presidents.

Iwaki, 55, is also a deputy president of Sony Corp. and is considered a possible successor to Sony Chief Executive Norio Ohga. Masaaki Morita had once been considered a candidate for the CEO post, but his age and relationship to the chairman were viewed as handicaps. In addition to leaving his U.S. posts, Morita is resigning as a Sony director and will become chairman of a Sony life insurance subsidiary.

In reporting the earnings results, Sony said the first part of its current fiscal year will also be difficult, but that economic recovery should help results in the second half.