Sony has reported a surprise Y260bn ($3.18bn) net loss and said the effects of Japan’s March earthquake and tsunami could do lasting damage to its domestic moneymaking ability.

The full-year loss, revealed in a preliminary earnings report on Monday, was the technology and entertainment group’s third in as many years and its largest under Sir Howard Stringer, chief executive since 2005.

The immediate cause was a Y360bn one-off tax charge, as Sony wrote off deferred tax credits banked during the past two years of deficits. The credits have value only if Sony earns taxable profits in Japan – but it said that confidence had been eroded by the disaster.

“The earthquake and tsunami did major damage to our supply chain and created the risk of lasting electricity shortages,” said Masaru Kato, chief financial officer. “There is some distortion in our domestic profit structure.”

Sony stressed that it remained in the black at the operating level, and the accounting charge would not drain cash. Still, the results could unnerve investors who had expected Sony to return to net profit this year.

Stock analysts had predicted a lossmaking fourth quarter, in large part as a result of the natural disaster, but they had expected Sony to be profitable for the full year.

Operating income of Y200bn, before taxes and one-off charges, was also short of analysts’ average estimate, by about Y50bn.

Sony had in February forecast a Y70bn net profit. It is not scheduled to announce final earnings until Thursday, but a Tokyo Stock Exchange rule forced it to release preliminary results three days early. Companies are required to inform investors immediately if they conclude that they will miss earnings targets by 30 per cent or more.

The March 11 earthquake and tsunami have pushed the economy into recession and caused losses at many manufacturers with factories and suppliers in the country’s north-east.

Sony has suffered the additional blow of an attack by computer hackers last month on its PlayStation Network video game platform and other internet-based services, in which personal information belonging to 100m users was exposed to theft. Sony said it expected the security breach to cost it Y14bn, a sum that will come out of its earnings in the current year.

But it was the natural disaster that was most damaging. Sony said the effects of the quake and tsunami would cost it Y150bn this year, leaving its operating profit roughly at the level of last year after anticipated gains from the restructuring.

For Chief Executive Officer Howard Stringer, this was supposed to be Sony Corp. ( 6758 )’s year.

The company that invented the Walkman was preparing to launch the new PlayStation Portable player and its first tablet computers in time for Christmas, the money-losing games division finally turned profitable and Stringer had picked the front- runner to eventually succeed him in Kazuo Hirai. That was less than three months ago.

Then Japan’s strongest earthquake on record hit and hackers invaded the company’s Internet entertainment services in the second-largest online data breach in U.S. history. The result: Sony yesterday forecast the earthquake and the attack will erode $2 billion from operating profit this fiscal year and keep earnings from meeting analysts’ estimates.

“Sony said it was going to be its year but it looks like it then got a smack in the eye,” said Shiro Mikoshiba, an analyst at Nomura Holdings Inc. in Tokyo. “In terms of earnings, we’re probably going to have to wait for six months or so before we can hope to see impressive results.”

Sony, Japan’s biggest exporter of electronics, fell 0.5 percent yesterday before the earnings statement. They fell to 2,211 yen, the lowest close since July 2009 in Tokyo trading, and extended their drop to 24 percent this year.

Operating income in the 12 months to March 2012 will be similar to the 200 billion yen ($2.5 billion) last fiscal year, the Tokyo-based company said in a preliminary earnings statement yesterday. The forecast missed the 254.7 billion-yen average of nine analyst estimates compiled by Bloomberg.

Earthquake, Hackers

Sony estimated the March 11 earthquake will erode operating profit by 150 billion yen this fiscal year as the maker of Bravia televisions struggles to improve earnings even after restarting the plants that were disrupted by the disaster. Last month’s unauthorized intrusion into the PlayStation network may cost the company 14 billion yen, it said.

Chief Financial Officer Masaru Kato said yesterday the lowered profit outlook forced Sony to write down the value of the deferred tax assets by 360 billion yen last quarter, resulting in the company’s widest annual net loss in 16 years. It was also the first time Sony posted three consecutive full- year losses since its listing in 1958.

Harsh Environment

“This may be a conservative forecast, but the operating profit level still looks much lower than expected even if you take the earthquake impact into account,” said Kazuharu Miura, a senior analyst at SMBC Nikko Securities Inc. “Sony continues to face a harsh business environment.”

Still, Sony yesterday forecast its net loss will turn positive this fiscal year and revenue will likely increase after a 0.5 percent drop.

Growth was on Stringer’s mind March 10, when he spoke to reporters in Tokyo about the promotion of Hirai, his games chief, as the frontrunner to carry out the vision to integrate Sony’s TVs and computers with content from the entertainment businesses.

“It’s a very exciting year,” Stringer said then. “We have a tablet coming out, we have the PlayStation network for the video and music services growing in strength,”

The following day, the earthquake hit, crippling scores of factories including those of Sony. Nine of the company’s electronics factories in northeastern Japan that had been disrupted by the disaster had resumed operations as of April 28, according to the company. Other plants had to curtail production because of material and component shortages.

About a month later, the maker of PlayStation game consoles was attacked by hackers who may have gained information on more than 100 million user accounts of Sony’s online services for games, music and films.

The PlayStation Network and Qriocity entertainment services went back online in the U.S. and other regions excluding Asia on May 15, more than three weeks after it suspended services. The company plans to fully resume the services by the end of this month.