Sony Group raised its full-year outlook for sales and profit after its media divisions outperformed, suggesting resilient consumer spending and a weaker yen is stabilizing the business.
The Japanese electronics and entertainment giant is targeting net sales of ¥12.4 trillion ($82.1 billion) in fiscal 2024, up from ¥12.2 trillion and better than estimated. It stuck with an existing forecast for operating income of ¥1.17 trillion. Notably, its prediction for music and gaming profit both surpassed analysts’ expectations.
The weaker yen may have played a role in propping up the numbers, given Sony’s globe-spanning business. The conglomerate continues to grapple with an uncertain global economic climate. Price discounts likely propelled sales of the marquee PS5 gaming console, reversing a slowdown in growth that emerged during the June quarter. Sony is launching a slimmer version of the device this Friday with a goal of riding sales momentum into the year-end holiday season.
“The result is overall a tad weak. It raised the fiscal outlook, but since operating profit remained unchanged, the outlook hike was due mostly to a weak yen,” said Kazunori Ito, equity research director at Morningstar.
The discounting is weighing on margins and may force chief operating officer Hiroki Totoki, who began to oversee the PlayStation business last month, to implement cost-cutting measures. Already, Sony is decreasing staff at some of its major studios. Sony on Thursday reported a less-than-projected ¥263.01 billion operating income for the September quarter.