By Sam Nussey
TOKYO, Feb 5 (Reuters) – Japan’s Sony on Thursday reported a 22% rise in third-quarter operating profit that trounced forecasts and lifted its full-year outlook, although sales of its PlayStation 5 console slid.
Sony’s shares jumped 4% on the results, also helped by its announcement of an expansion in its share buyback scheme.
Operating profit climbed to 515 billion yen ($3.3 billion) for October-December, comfortably above the 469 billion yen average of 10 analyst estimates compiled by LSEG.
It hiked its full year operating income forecast by 8% to 1.54 trillion yen, citing the performance of its music business.
The Japanese conglomerate has, over the years, made a successful pivot from household electronics to entertainment, but has seen its share price slide in recent months as investors question what its future growth drivers will be.
In one concern, Sony sold 8 million units of its PlayStation 5 console during the October-December quarter, which includes the key year-end shopping season – a 16% decline from the same period a year earlier.
That said, profit at the gaming unit grew 19% to 140.8 billion yen, with higher sales of software offsetting larger losses from hardware.
Hardware makers also are grappling with surging memory chip prices amid a boom in AI investment. Shares of gaming peer Nintendo slumped on Wednesday amid concern over the impact of rising chip prices on margins.
The adoption of artificial intelligence in the videogames industry has also created uncertainty, with gaming stocks falling in recent days on the introduction of an AI-powered game-making tool by Alphabet’s Google.
Sony’s console business is expected to receive a boost from the launch of Take-Two Interactive’s delayed “Grand Theft Auto VI” which is scheduled for release in November.
The conglomerate said it would expand a share buyback that runs to May to up to 150 billion yen from 100 billion yen previously.
($1 = 156.8400 yen)
(Reporting by Sam Nussey; Editing by Christopher Cushing and Edwina Gibbs)
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