Sony Looks Past Middling PS5 Sales to Raise Profit Outlook
Sony Looks Past Middling PS5 Sales to Raise Profit Outlook
(Bloomberg) -- Sony Group Corp. raised its full-year operating income forecast by 6% to 1.04 trillion yen ($9.2 billion) after reporting better-than expected earnings in the July-September quarter.
The Tokyo-based electronics giant had operating profit of 318.5 billion yen in the period, outperforming the analyst consensus estimate of 285.1 billion yen. The company cited improvements in its music, movies and electronics businesses as the reason for upgrading its outlook, which also included raising net income expectations to 730 billion yen.
Shares surged as much as 4.7% in Tokyo on Friday following the results.
Despite concern that pandemic-led demand for home entertainment is fading, Sony saw a strong second quarter thanks to an improved product mix of TV, digital cameras and audio and video products, the company said. Chief Executive Officer Kenichiro Yoshida has said Sony’s group structure helps it maintain steady earnings regardless of global conditions.
The company sold 3.3 million units of the PlayStation 5 console, which has been in limited supply since its launch in November. Hardware sales improved from the Sony’s first quarter, but revenue from games software declined relative to the prior three months as players spent less on in-game purchases.
PlayStation Network monthly active users also declined for the third quarter in a row, reaching 104 million at the end of the period. The company had 47.2 million PlayStation Plus subscribers.
“Sales of PlayStation 5 so far this fiscal year are behind analyst expectations due to chip shortages,” Ace Research Institute analyst Hideki Yasuda said. “Despite strong demand for the console, Sony won’t be able to raise its 14.8 million unit sales goal for this FY. That’s the maximum Sony would be able to sell.”
Sony’s stronger business units were driven in part by an increase in the company’s artists being played on streaming services and solid mobile game and anime revenue at home in Japan. The loss of K-pop boy band BTS to Universal Music Group, announced this month, may pose a challenge going forward.
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