Sony (SNE) Stock Soars Over 7% After Raising Full-Year Profit Guidance on 40% Sales Growth in Gaming Sector
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Japanese tech giant Sony (NYSE: SNE) raised its full-year profit and sales forecasts today after it reported an operating profit of 359.2 billion Japanese yen ($3.42 billion) in a quarter to end-December.
This is 20% higher compared to a year ago and better than what market analysts expected. from the same period a year ago and beating expectations. Revenues for the quarter came in at 2.7 trillion yen ($25.70 billion), up 9% year-on-year.
Sony upgraded its full-year profit guidance to 940 billion yen ($8.95 billion) from prior 700 billion yen ($6.66 billion), representing an increase of 34%.
As far as its gaming business is concerned, sales rose by 40% to 883.2 billion yen ($8.41 billion), driven by a launch of the new PS5 console. As a result, this business unit saw its operating income soaring to 80.2 billion yen ($760 million) compared to a year ago.
"It is difficult for us to increase production of the PS5 amid the shortage of semiconductors and other components," Hiroki Totoki, Sony's chief financial officer, said during a call with investors.
The company sold 4.5 million PS5 consoles last year, which is in line with what analysts were expecting. As for this year, it is expecting to sell 17.8 million units by the end of 2021 and 63.9 million by 2024, according to Omdia.
“We expect demand to remain strong for 2021,” Steven Bailey, principal analyst for games at Omdia, told CNBC.
“Supply will define the marketplace until at least Q2, and after that it’s down to PlayStation and Xbox to really start delivering the goods in terms of first-party exclusives. Along with retail bundling, this is a crucial aspect of stoking second-year momentum in the console marketplace.”
Shares of Sony are up 7.3% in pre-open Wednesday.
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