By Sam Nussey
TOKYO, July 31 (Reuters) – Sony hiked its full-year earnings forecast on Friday, as strong performance at its gaming business helped the Japanese conglomerate deliver a better-than-expected jump of 40% in first-quarter profit.
The company has been praised for its pivot to entertainment, but the market is concerned about the impact of AI and soaring memory chip costs, which have weighed on tech firms such as smartphone makers Apple and Samsung Electronics.
Sony reiterated on Friday it has secured enough memory chip supply for the current financial year.
“We have secured the quantity of memory necessary to meet our projected sales volume for FY26, and there is no change to our plan for hardware profitability for FY26 to remain similar to FY25,” it said in an earnings statement.
The PlayStation maker hiked its group operating profit for the year ending March by 8% to 1.72 trillion yen ($10.70 billion). It pointed to the impact of U.S. tariff refunds, a boost from exchange rates and cost control for the rosier outlook for its gaming unit.
Sony’s shares pared losses to trade flat in Tokyo after the news.
Sony is expected to be a major beneficiary of the launch of “Grand Theft Auto VI” on November 19 as Microsoft’s Xbox business retrenches.
In the first quarter Sony sold 1.6 million PlayStation 5 consoles, roughly a third fewer than the same period a year earlier.
Take-Two Interactive Software could sell 30 million to 35 million “GTA VI” units by year-end, according to a forecast from Ampere Analysis analyst Piers Harding-Rolls.
Other games coming to PS5 include the major in-house title “God of War Laufey”, which is due for release in February.
In the April-June quarter, group operating profit rose 40% to 476.5 billion yen due to the strength of the gaming and image sensors businesses.
Camera lens maker Tamron said on Thursday it had received an acquisition proposal from Sony and established a committee to review its options.
Sony is a leading manufacturer of cameras and image sensors, while Tamron is a supplier of lenses for cameras made by Sony and rivals Nikon and Canon.
The company raised the forecast for its image sensors business, citing higher sales and exchange rates.
For the July-September quarter, analysts on average expect Sony to report an operating profit of 465 billion yen. The company’s shares were down 8% year-to-date ahead of the earnings.
($1=160.7200 yen)
(Reporting by Sam Nussey; Editing by Muralikumar Anantharaman and Jamie Freed)
Comments