SONY Group raised its forecast for revenue and profit in the fiscal year to March after a successful quarter for its music and gaming software divisions.
The Japanese entertainment giant said its operating profit during the three months ended June was 279.1 billion yen (S$2.5 billion), beating the consensus estimate of 273.9 billion yen and the year-earlier profit of 253 billion yen. Sales for the fiscal year are now expected to come in at 12.6 trillion yen, with 1.3 trillion yen in operating profit, both slightly raised.
The key PlayStation division saw a lift from the popularity of first-party and online multiplayer games, such as Helldivers 2, though its biggest boost came from favourable exchange rates, Sony said in its report on Wednesday (Aug 7). The company sold 2.4 million units of the ageing PlayStation 5 console, significantly below the three million that analysts had expected.
“The PlayStation business is not as good as the numbers suggest, because its profits and revenue were inflated by the weak yen,” Morningstar Investment director Kazunori Ito said. “Sony had said hardware sales would slow down from this fiscal year, but it seems that pace is a lot faster than what we had anticipated.”
Its music business segment contributed the largest share of profit in the quarter, thanks to its catalogue of best-selling artists and the growing overseas popularity of made-in-Japan anime, which is also housed under the music group. The company saw higher revenue from merchandising and live events, as well as higher income from streaming services like Spotify. It revised its sales forecast for both gaming and music up by 3 per cent.
“The music segment has become an ideal cash-cow unit that other companies would be envious of,” said Toyo Securities analyst Hideki Yasuda. “The segment should continue to expand for the foreseeable future.”
Production yields of Sony’s image sensors have improved and the company said it saw an increase in unit sales during the period. The global smartphone market accelerated its return to growth in the June quarter, with shipments rising 6 per cent, market watcher IDC reported in July. Sony customers Xiaomi and Vivo were the leaders in expanding their units shipped.
But analysts warn that the Tokyo-based company may face a new set of challenges if the yen resumes its advance. The firm makes much of its revenue overseas, including sales of consoles and image sensors as well as entertainment licensing, and the yen’s prolonged weakness in recent years has helped bolster its bottom line. BLOOMBERG
