Sony (SONY) Tops Q1 Views on Robust PS5 Demand But Misses on Profit Guidance to Send Shares Lower, Analysts Cautious Over Chip Shortages

August 4, 2021 6:46 AM EDT
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Shares of Sony Group (NYSE: SONY) closed 3.23% lower in Tokyo today after the company delivered FQ1 results.

Sony said it benefited from robust demand for its PlayStation 5 games console to help the electronics company record a 26% rise in FQ1 operating profit, 280.1 billion yen ($2.57 billion) vs 207.96 billion yen expected from surveyed analysts.

Sales surged 15% to 2.26 trillion yen, but still not enough to allow the company to upgrade its 9.7 trillion yen full-year sales forecast.

As a result, the company raised its profit forecast for the full year to end-March to 980 billion yen from earlier 930 billion yen, but still lower compared to the consensus of 1 billion yen. A net profit is expected at 700 billion yen ($6.4 billion) up from its earlier estimate of 660 billion yen.

"This result showed the advantage of a conglomerate -- strong sectors can offset weakening ones," Hideki Yasuda, an analyst at Ace Research Institute in Tokyo, told AFP.

“Sales of digital cameras were much better than expected. And music-streaming businesses were also stronger than we thought," he added.

However, the analyst warns that "demand is sharply weakening this year" for gaming products as people spend more time away from their houses. Sony said it projects to sell 14.8 million PS5 units in its 2022 fiscal year.

"Sony risks losing would-be users if the current supply shortage continues," commented Yasuo Imanaka, chief analyst at Rakuten Securities.

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