By Sam Nussey
TOKYO, Feb 5 (Reuters) – Japan’s Sony on Thursday raised its full-year outlook after reporting a forecast-beating 22% jump in quarterly operating profit, as a weaker yen helped it cushion the impact of slower PlayStation 5 sales.
Sony’s shares climbed 1% on the results, also helped by its announcement of an expansion in its share buyback scheme.
A robust performance from its image sensor and music divisions helped boost operating profit to 515 billion yen ($3.3 billion) – 9% more than an LSEG consensus estimate.
It hiked its annual operating income forecast by 8% to 1.54 trillion yen.
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.
Its image sensor division reported a 21% increase in sales while Sony’s music business, home to singers such as Beyonce, Adele, SZA and Shakira, saw a 13% rise in revenue from streaming services, live events and merchandising in recorded music.
CONSOLE AND CHIP CONCERNS
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, helped by higher sales of software and a weaker yen.
The improved performance from Sony’s gaming unit comes as many other tech companies warn that surging memory chip prices could disrupt supply chains across various products from smartphones to laptops and increase consumer prices.
On Wednesday, shares of gaming peer Nintendo slumped amid concern over the impact of rising chip prices on margins, while chip supplier Qualcomm’s stock also tumbled in after-hours trade after a disappointing second-quarter outlook due to the memory chip crunch.
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 Miyoung Kim and Edwina Gibbs)
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