The Sony Group Corp. logo displayed on a screen at the Combined Exhibition of Advanced Technologies (Ceatec) in Chiba, Japan, on Wednesday, Oct. 16, 2024.
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Sony Group on Tuesday posted a stronger-than-expected rise in second-quarter operating profit and announced 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 ($20.14 billion) vs. 2.985 trillion yen expected
- Operating profit: 429 billion yen vs. 398.44 billion yen expected
Operating profit climbed 10% from a year earlier, while revenues were up 5%. Sony shares jumped more than 6% after the earnings release.
The Japanese technology giant raised its full-year outlook, expecting operating profit to climb by 100 billion yen, or 8% from its previous forecast, led by 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 estimated losses from U.S. tariffs to 50 billion yen from 70 billion yen.
While Sony has been affected by U.S. President Donald Trump’s global tariff regime launched in April, Tokyo reached a trade deal with Washington in July that lowered duties on Japanese exports to 15% from the 25% initially proposed. The reduced tariffs took effect Aug. 7.
Music and imaging boost
Profit from Sony’s music business increased 27.65% year over year to 115.4 billion yen, while operating profit from its imaging business jumped nearly 50% to 138.3 billion yen, 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.
The company 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.
KPop Demon Hunters
Despite Sony’s strong earnings showing, profit from its picture business shrank nearly 25% 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 K-pop Demon Hunters drive significant viewership and even contributed 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.
