Sony shares had their biggest surge in seven months after the company said PlayStation 5 production went better than expected.
Sony Group Corp. shares had their biggest surge in seven months after the company said PlayStation 5 production went better than expected in the past quarter and it now aims to surpass its sales target for the fiscal year.
The Tokyo-based conglomerate also bumped its full-year operating profit forecast by 5%, largely on the weakness of the yen. It reported sales of 2.75 trillion yen ($18.6 billion) in the three months ended September, 16% higher than the prior year, after getting a boost from its music streaming division. The company is now gearing up to beat its goal of 18 million PS5 sales this fiscal year and set a target of 23 million units for the next.
Shares were up 7% in Tokyo on Wednesday after slumping more than 30% this year prior to its latest earnings report.
Sony’s results proved better than feared, as the company’s various businesses are dependent on strong consumer demand, which has dissipated this year with a global economic downturn and potential recession on the horizon. Chief Financial Officer Hiroki Totoki said the games business was feeling the compound effects of cooler consumer appetites and the worldwide reopening after the pandemic, with both factors pushing people away from games and other leisure spending.
Still, the company said it’s seeing strong user engagement with newer games on the PlayStation platform and sounded a positive note about the release of its next God of War game, scheduled for next week, as a catalyst for more sales. It assembled 6.5 million PS5s in the past quarter, which was a faster production pace than expected, Totoki said.
“Considering the PlayStation did not see a single big game in the quarter, numbers were surprisingly stable,” said industry analyst Serkan Toto of Kantan Games. “Video games are a hit-driven business. Sony did relatively well despite not having any blockbusters to drive growth this quarter.”
Sony Bumps Up Profit Outlook as Weak Yen Juices Sensor Sales
The image sensor business was aided by the fall in the yen’s value — as much of the production is done in Japan and shipped overseas — in a year when smartphone sales have slumped globally and especially in China, the world’s biggest mobile market. Sony said it’s seeing resilient demand for premium devices, which use more cameras and require more sensors per unit sold.
“This announcement dispels excessive concerns to some extent, as the dominant market view lately was that the firm would cut guidance again on concern over a slowdown in high-end models at a major North American smartphone maker,” SMBC Nikko analysts Ryosuke Katsura and Hajime Ono wrote. A recovery in investor sentiment would hinge primarily on growth in the games division over the holiday period and beyond, they added.
Sony shares had their biggest surge in seven months after the company said PlayStation 5 production went better than expected.
Sony Group Corp. shares had their biggest surge in seven months after the company said PlayStation 5 production went better than expected in the past quarter and it now aims to surpass its sales target for the fiscal year.
The Tokyo-based conglomerate also bumped its full-year operating profit forecast by 5%, largely on the weakness of the yen. It reported sales of 2.75 trillion yen ($18.6 billion) in the three months ended September, 16% higher than the prior year, after getting a boost from its music streaming division. The company is now gearing up to beat its goal of 18 million PS5 sales this fiscal year and set a target of 23 million units for the next.
Shares were up 7% in Tokyo on Wednesday after slumping more than 30% this year prior to its latest earnings report.
Sony’s results proved better than feared, as the company’s various businesses are dependent on strong consumer demand, which has dissipated this year with a global economic downturn and potential recession on the horizon. Chief Financial Officer Hiroki Totoki said the games business was feeling the compound effects of cooler consumer appetites and the worldwide reopening after the pandemic, with both factors pushing people away from games and other leisure spending.
Still, the company said it’s seeing strong user engagement with newer games on the PlayStation platform and sounded a positive note about the release of its next God of War game, scheduled for next week, as a catalyst for more sales. It assembled 6.5 million PS5s in the past quarter, which was a faster production pace than expected, Totoki said.
“Considering the PlayStation did not see a single big game in the quarter, numbers were surprisingly stable,” said industry analyst Serkan Toto of Kantan Games. “Video games are a hit-driven business. Sony did relatively well despite not having any blockbusters to drive growth this quarter.”
Sony Bumps Up Profit Outlook as Weak Yen Juices Sensor Sales
The image sensor business was aided by the fall in the yen’s value — as much of the production is done in Japan and shipped overseas — in a year when smartphone sales have slumped globally and especially in China, the world’s biggest mobile market. Sony said it’s seeing resilient demand for premium devices, which use more cameras and require more sensors per unit sold.
“This announcement dispels excessive concerns to some extent, as the dominant market view lately was that the firm would cut guidance again on concern over a slowdown in high-end models at a major North American smartphone maker,” SMBC Nikko analysts Ryosuke Katsura and Hajime Ono wrote. A recovery in investor sentiment would hinge primarily on growth in the games division over the holiday period and beyond, they added.
