PlayStation parent Sony Group Corp (NYSE:SONY) stock slid on Thursday after the company reported its quarterly results and annual guidance.
Revenue, Earnings Beat Expectations
Sony's consolidated sales rose 0.5% year-on-year to $24.11 billion (3.71 trillion Japanese yen), exceeding analyst expectations of $23.88 billion.
Earnings came in at 41 cents (62.82 yen) per share in the third quarter, above the consensus forecast of 33 cents.
Segment Performance
Sony's Game & Network Services division—home to the PlayStation platform—generated 1.61 trillion yen in revenue, down 4% from a year ago, driven by a decrease in sales of hardware due to lower unit sales.
Operating income increased 19% to 140.8 billion yen, driven by sales from network services and first-party game software titles.
The company sold 8.0 million PS5 consoles during the quarter, down from 9.5 million a year earlier but up from 3.9 million in the previous quarter.
The Music segment delivered robust momentum, with revenue up 13% to 542.4 billion yen and operating income rising 9% to 106.4 billion yen.
The Pictures business posted an 11% decline in revenue to 353.3 billion yen due to lower revenues from theatrical releases in the current fiscal year in Motion Pictures.
Operating income fell 9% to 30.9 billion yen.
Revenue in Entertainment, Technology & Services fell 7% to 658.1 billion yen due to a decrease in unit sales in Displays.
Operating income fell 23% to 59.4 billion yen.
Sony's Imaging & Sensing Solutions unit posted strong momentum, with revenue climbing 21% to 604.3 billion yen, driven by higher sales of image sensors for mobile products.
The operating income rose 35% to 132.0 billion yen.
Consolidated operating income increased 22% to 515 billion yen, driven primarily by strong results in the I&SS division.
Net income rose 11% to 377.3 billion yen.
Sony ended December with 2.09 trillion yen in cash and equivalents.
Bloomberg cited CFO Lin Tao telling analysts that the company has secured enough memory supply for the PlayStation 5 through the next fiscal year.
While memory costs may affect PS5 sales, Sony is working with suppliers to ensure adequate supply to meet demand, he said.
Despite global memory shortages, Tao expects minimal impact on the company's sensor-making division, focusing on high-end smartphones.
Outlook
Sony raised its fiscal 2025 revenue forecast to 12.3 trillion yen from the prior outlook of 12.0 trillion yen.
It lifted its operating income expectations to 1.54 trillion yen from 1.43 trillion yen.
The company still expects additional U.S. tariffs to reduce operating income by 50 billion yen.
SONY Price Action: Sony Group shares were down 1.87% at $21.50 during premarket trading on Thursday, according to Benzinga Pro data.
Photo by RYO Alexandre via Shutterstock
