Sony boosts annual outlook after stronger-than-expected quarterly profit

Investing.com -- Sony Group Corp (TYO:6758) (NYSE: SONY) posted a record quarterly profit that beat expectations and lifted its full-year outlook, brushing off concerns over rising memory chip costs as strength in gaming, music and imaging helped drive earnings higher.

Operating profit (OP) climbed 22% to 515 billion yen, about 9% above an LSEG consensus estimate, prompting the company to raise its annual forecast by 8% to 1.54 trillion yen. Operating profit margin for the quarter rose to 13.9% from 11.5%.

For the three months ended December, net profit rose 11% year on year to 377.32 billion yen, beating the 348.2 billion yen analysts had expected in a Visible Alpha poll, while revenue edged up 0.5% to 3.714 trillion yen, also coming in above forecasts.

Sony now expects revenue of 12.300 trillion yen and net profit of 1.130 trillion yen for the year ending March, up from prior projections of 12.000 trillion yen and 1.050 trillion yen, respectively, while reiterating a 50 billion yen tariff hit to operating profit.

"Sony delivered a strong Q3 with OP ¥515bn (+22% YoY) despite flat sales," Jefferies analyst Atul Goyal said in a post-earnings note.

The gaming division remained a key profit driver, with operating profit rising 19% to 140.8 billion yen, helped by higher software sales and a weaker yen.

Sony sold 8 million PlayStation 5 consoles in the quarter, down 16% from a year earlier, though monthly users on the PlayStation Network increased, pointing to stronger engagement.

Elsewhere, sales of image sensors used in smartphones jumped 21%, while the music business posted a 13% rise in revenue from streaming, live events and merchandising.

"In our view, Sony is in a strong position in each of its businesses," Goyal wrote.

Sony also expanded its share buyback program to up to 150 billion yen from 100 billion yen and said it would book around 45 billion yen in valuation gains from its stake in Peanuts Holdings.

Chief Financial Officer Lin Tao said the company is securing enough memory chips for the next holiday season and working with suppliers to source more, adding Sony will offset higher component costs through software and network services. She said the company plans to use AI in game development “rather than to be disrupted.”

You May Also Be Interested In

• Victoria’s Secret shares slump 16% on weak Q3 operating income outlook
• Toro Company (TTC) Tops Q3 EPS by 3c; offers guidance
• John Wiley & Sons, Inc. (WLY) Tops Q1 EPS by 4c ; Offers Guidance