Japanese tech giant’s profits fall 29%

The PlayStation DualSense controller and the PlayStation 5 console.

Jakub Porzycki | Nuphoto | Getty Images

Sony reported a 29% drop in fiscal second-quarter operating profit on Thursday, as the Japanese electronics giant suffered from weakness in its imaging sensor (or chip) business..

Here are Sony’s results in the September quarter compared to LSEG consensus estimates:

  • Revenue: 2.8 trillion yen ($18.5 billion) versus 2.87 trillion yen expected. This represents an increase of 8% year-on-year.
  • Operating profit: 263 billion Japanese yen versus 304.4 billion yen expected. This represents a 29% year-over-year decline.

Sony attributed the significant drop in profits to weakness in its imaging sensors business, as well as lower profits in its financial and entertainment, technology and services businesses.

The company said profit from its chip division fell more than 28% in the fiscal second quarter.

Sony supplies camera chips to consumer technology manufacturing giants like Applewhich uses its semiconductors in its iPhones.

Sales forecasts raised

Despite falling profits, the company raised its full-year sales forecast, saying it now expects total revenue of 12.4 trillion yen (up from 12.2 trillion yen yen previously forecast), thanks to positive exchange rates.

the Japaneses yen has weakened significantly against the dollar and Sony makes most of its revenue outside the United States.

Sony also attributed the improvement in its revenue forecast to anticipated exceptional performance in its video games, music and imaging and sensing solutions businesses.

Sony expects its game and network services business, which is responsible for its popular PlayStation console, game studios and game networks, to post higher-than-expected sales across the board. the year, thus improving its performance.

The company is off to a good start for its new PS5-exclusive game Marvel’s Spider-Man 2. The game sold over 2.5 million copies in its first 24 hours, making it the best-selling PlayStation Studios game in history over a 24-hour period.

Sony said it sold 4.9 million PlayStation 5 units in the fiscal second quarter, compared to 3.3 million units sold in the fiscal first quarter.

PS5 will sell 25 million units

The company said during its conference call that it expects its PlayStation 5 console to reach its goal of 25 million units shipped in 2023. This is an important milestone as analysts and investors have been closely monitoring signs of Sony’s PS5 performance.

Sony’s results come after Nintendo on Tuesday reported better-than-expected sales and profits for its fiscal second quarter, thanks to a boost from the “Super Mario Bros. Movie” and the highly anticipated May release of “The Legend of Game “Zelda: Tears of the Kingdom”.

In an interview, Sony’s Eric Lempel said this would mark the first year the PS5 would be “fully stocked” after shortages hit the company in 2020 and 2021 due to supply chain constraints.

“We launched [PS5] in 2020,” Lempel told CNBC. “We suffered from the same supply chain issues that everyone else was facing. Unfortunately, we were unable to deliver the PS5 to all consumers who wanted one.”

Thursday’s results follow a fiscal first quarter in which Sony reported a 33% year-on-year rise in revenue to 3 trillion Japanese yen, but a 31% drop in year-on-year profit. year at 253 billion yen.

The company then cited the weakness of its financial services and imaging division, which had experienced a slight slowdown following strikes led by the Writers Guild of America and other unions, to protest the use of artificial intelligence to generate film scenarios.

Sony said it expects the strike to have an impact on its next financial year, but the company is engaging in cost control measures to minimize it.


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