Sony raises revenue forecast after earnings beat, lifted by music and imaging divisions | USAEMALL.com

Sony Group on Tuesday reported an increase in its second-quarter operating profit that beat expectations, while announcing a share buyback of up to 100 billion Japanese yen ($648 million).

Here are Sony’s second-quarter results compared with LSEG SmartEstimates, which are weighted toward forecasts from analysts who are more consistently accurate: 

• Revenue: 3.108 trillion Japanese yen vs. 2.985 trillion yen expected
• Operating profit: 429 billion yen vs. 398.44 billion yen expected

Sony’s operating profit jumped 10% compared to the same period last year, while revenues were up 5%.

Following the earnings announcement, Sony’s shares were trading up 4%.

The Japanese technology giant raised its full-year outlook, expecting operating profit to climb by 100 billion yen, or 8% from its previous forecast, driven by gains from its imaging and sensing solutions and music segments. The company also lifted its annual revenue projection by 300 billion yen, or 3%, while trimming its estimate of tariff-related losses to 50 billion yen from 70 billion yen.

Profit from Sony’s music business increased 27.65% year over year to 115.4 billion yen. Meanwhile, its imaging business earned 138.3 billion yen in operating profit, up nearly 50% from last year, making it the company’s most profitable segment in the quarter.

Sony’s imaging and sensing solutions segment develops and manufactures advanced semiconductor products for a wide range of applications, from smartphones to automotive and industrial systems.

Sony also reported strong sales in its game and network services division, which houses its popular PlayStation home console brand. The segment represents Sony’s top revenue driver, but posted a decrease in profits in the September quarter, falling 13.26% to 120.4 billion yen.

Game and network services have performed well in recent quarters thanks to a shift to digital game purchases and the PlayStation Plus subscription service. Growth in hardware shipments has been comparably muted.

Despite Sony’s strong showing, its picture business sales shrank about 2.75% year over year. That was despite Sony Pictures Animation being behind this year’s smash hit production, KPop Demon Hunters, which premiered on June 20. 

The film, which was produced by Sony, has reportedly become the most popular Netflix film ever, and continues to break streaming records, even for its original soundtrack. 

Despite the success, Sony has missed much of this upside due to selling the film’s exclusive rights to Netflix.

While the exact details of the deal are unknown, it was reported that Sony made an initial $25 million profit from producing the film for Netflix.

Netflix saw KPop Demon Hunters drive significant viewership and even contribute to its 17% revenue jump in its September quarter.

However, in a bright spot for Sony, a sequel to the movie has already been confirmed, with Netflix reportedly providing the Japanese company a $15 million cash bonus for the first film’s performance.