Hack to cost Sony $35 million in IT repairs

Sony has put an estimate to the damage caused by the massive cyberattack against Sony Pictures Entertainment last year -- US$35 million.

While Sony said in an earnings report that the hack would cost $15 million "in investigation and remediation costs" for the quarter to Dec. 31, senior general manager Kazuhiko Takeda said Wednesday that the figure would be $35 million for the full fiscal year through March 31.

"The figure primarily covers costs such as those associated with restoring our financial and IT systems," a spokesman at Sony's Tokyo headquarters said later via email.

The U.S. Federal Bureau of Investigation held North Korea responsible for the attack, which came ahead of the planned release by Sony of a comedy movie about a plot to assassinate the country's leader Kim Jong Un.

While the numbers for Sony's Pictures segment are provisional, the company said Wednesday the damages weighed on the operating profit for the segment, which will be ¥54 billion (US$460 million) for the year ending March 31, up from ¥51.6 billion a year earlier.

"Sony believes that the impact of the cyberattack on its consolidated results for the fiscal year ending March 31, 2015 will not be material," it said in the earnings report and updated forecasts for the year.

Sony's other results were a mixed bag. The blockbuster sales of Apple's iPhone 6 boosted demand for Sony's image sensors, which power the phone's camera system. That, combined with demand for PlayStation 4 consoles, encouraged Sony to reduce the net loss it predicts for the year to March 31 to ¥170 billion from the ¥230 it predicted in October. But that's still worse than the ¥128 billion loss it posted for its previous fiscal year, when it incurred huge costs from exiting its Vaio PC business.

Sony said this week it would ramp up CMOS image sensor production capacity to about 80,000 wafers per month from the current 60,000 to meet smartphone demand.

Even though fourth-quarter sales of its Xperia smartphones rose year on year, Sony said it would cut 2,100 jobs in its struggling mobile communications segment, which will post a net loss of ¥215 billion for its fiscal year to March 31.

"In overall electronics excluding mobile, results are improving due partially to the impact of restructuring," Chief Financial Officer Kenichiro Yoshida told an investor briefing.

Under the restructuring drive spearheaded by CEO Kazuo Hirai, Sony has been shedding business units. Aside from PCs, it quit e-readers last year and announced the sale of Sony Online Entertainment, known for making PC games, earlier this week.

Tim Hornyak covers Japan and emerging technologies for The IDG News Service. Follow Tim on Twitter at @robotopia.

Tim Hornyak

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