Sony Boosts Forecasts After Record Quarter | [Year] Update

Sony Group increased its annual prospects after registering a record quarterly profit, even in the face of persistent doubts among investors due to the high costs of memory chips and the latest moves that the company has implemented.

The Japanese company expects that by the end of its fiscal year next March it will reach revenue of 12.3 billion yen, to generate 1.54 trillion yen in operating profits – an increase in its annual outlook by 8% – and 1.13 trillion in net profits, this despite a tariff impact of 50 billion yen.

In the quarter, revenue increased 0.5%, up to 3.71 trillion yen, and net profit YoY reached 377.32 billion yen, which exceeded the estimates of Visible Alpha analysts by 29.12 billion.

In addition, The conglomerate’s operating profit increased 22%, reaching 515 billion yen, exceeding the consensus estimate by approximately 9%.

Sony delivered strong third quarter with operating profit of 515 billion yen (+22% year-on-year) despite flat sales

said Jefferies analyst Atul Goyal.

This acceleration has been driven by the diversification that the Japanese conglomerate has had from consumer products to entertainment, where the games division has remained one of the largest drivers, with a 19% increase in operating profit, despite the 16% decrease in sales of PlayStation 5.

Other sectors of the company that also performed well were the sales of image sensors used in smartphones, which increased 21%, and the music industry, in which they increased 13%.

Sony facing the memory chip crisis

Since late last year, Sony and other technology and artificial intelligence companies have been hit by a increase of up to 170% in RAM memory prices due to a serious global shortage that, according to experts, could spread to become a problem not only of components.

Although the high demand and low production of Chips has directly affected sectors such as consoles, smartphones and televisions, the financial director of Sony, Lin Taoassured that the company is working to compensate for the shortage by working with suppliers.

The new direction of the company in entertainment

In the midst of the financial boost, at the beginning of the year the Japanese company announced through a statement that will sell 51% of control of your home entertainment business, which includes Braviaa global television brand that has been the company’s flagship for years.

TCL Electronics Holdingsone of the largest manufacturers of consumer electronics products in the world, is the one who acquired half of this division of the company and with whom Sony will create a joint venture focused on the manufacturing of televisions of both brands that will begin operations in 2027.

With information from Investing and Forbes

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