The logo of Sony Group Corporation is displayed on a screen at the Advanced Technology Exhibition (CETECH) held in Chiba Prefecture on Wednesday, October 16, 2024.
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sony group on Tuesday reported a stronger-than-expected increase in second-quarter operating profit and announced up to 100 billion yen ($648 million) in share buybacks.
Below is Sony’s Q2 results compared to LSEG SmartEstimates, which emphasize more consistently accurate analyst forecasts.
Sales: 3,108 billion yen ($20,140 million) vs. forecast 2,985 billion yen Operating income: 429 billion yen vs. forecast 398,440 million yen
Operating profit increased 10% year over year, and sales increased 5%. Sony stock rose more than 6% after the earnings announcement.
The Japanese technology giant raised its full-year outlook, expecting operating profit to rise by 100 billion yen, or 8%, from its previous forecast, led by its imaging and sensing solutions and music divisions. The company also raised its annual sales forecast by 300 billion yen (3%), while lowering its estimated loss from U.S. tariffs to 50 billion yen from 70 billion yen.
Sony has been affected by the global tariff regime introduced by US President Donald Trump in April, but Japan reached a trade deal with Washington in July that lowered tariffs on Japanese exports from an originally proposed 25% to 15%. The tariff reduction took effect on August 7th.
Enhanced music and images
Sony’s music business’s profit rose 27.65% year-on-year to 115.4 billion yen, and its video business’ operating profit rose nearly 50% to 138.3 billion yen, making it the company’s most profitable division during the quarter.
Sony’s Imaging and Sensing Solutions division develops and manufactures advanced semiconductor products for a wide range of applications, from smartphones to automotive and industrial systems.
The company also reported strong sales in its game and network services division, which includes the popular PlayStation brand of home game consoles. The division, which is Sony’s biggest revenue driver, recorded a decline in profit in the September quarter, dropping 13.26% to 120.4 billion yen.
Games and network services have performed well in recent quarters thanks to digital game purchases and a shift to the PlayStation Plus subscription service. Growth in hardware shipments has been relatively slow.
KPop Demon Hunter
Despite Sony’s strong earnings, profits from its video business fell nearly 25% year-on-year. This is despite Sony Pictures Animation producing this year’s blockbuster “KPop Demon Hunters,” which premiered on June 20th.
The Sony-produced film is reportedly the most popular movie in Netflix history, and continues to break streaming records for its original soundtrack.
Despite its success, Sony missed out on much of this turnaround as it sold exclusive rights to the film to Netflix.
Although the exact details of the deal are unclear, Sony reportedly made an initial profit of $25 million by producing the film for Netflix.
At Netflix, K-Pop Demon Hunter saw strong viewership growth and also contributed to a 17% revenue increase in the September quarter.
But in a bright spot for Sony, a sequel to the film has already been confirmed, with Netflix reportedly offering the Japanese company a $15 million cash bonus for the first film’s performance.
