Mirrorless Takes Another Hammering

Started May 17, 2013 | Discussions thread
Abrak
Senior MemberPosts: 1,358
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Re: Mirrorless Takes Another Hammering
In reply to Midwest, May 18, 2013

Midwest wrote:

Abrak wrote:

ed2002 wrote:

Olympus plans on selling 300,000 interchangeable lens cameras this year, and was profitable this quarter.

Olympus might have been profitable overall last quarter but the imaging division made a 'record loss'. In fact it lost more in 4Q than in the previous 3Qs combined. On sales of 19.9bn yen, the imaging division made a pretty staggering loss of 14.3bn yen.

And what must be kept in mind is that a money-losing division cannot be supported indefinitely by the profitable divisions of the company - which exists to make money, not to subsidize money-losing divisions. Every division of any business needs to be operated as its own profit (or loss) center and dealt with on its own. There's no 'Well, yes our division is losing money, but the XYZ branch of the company makes even more than we are losing so we are OK.' Eventually the money loser must be made profitable, sold or liquidated.

I am not hoping for that to happen to any company, just pointing out that if a camera division loses money while the company as a whole makes money, the camera division is not going to be propped up indefinitely by the rest of the company.

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It's nice to say that nice pictures are nice.

Well absolutely....

To put Olympus's imaging division losses in perspective they lost US$250m last year which means that it will take them not much over 2 years to burn through the US$500m equity cash injection that Sony gave them last year.

I happen to be a bit of an Olympus fanboy so dont really like seeing them in this current predicament. Personally I think they should sell the business (Sony might take it?) while there is value left in the business to sell. I dont want to hear that they are closing the business - but in a couple of years they may be left with no choice.

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