Japan’s Sony Group Corp posted on Wednesday a 32% jump in third-quarter operating profit that smashed analysts’ estimates, as earnings at its pictures unit surged on the back of the success of “Spider-Man: No Way Home”.
Operating profit was 465.2 billion yen ($4.05 billion) for the three months to Dec. 31. That compared with an estimated average profit of 351.6 billion yen from nine analysts surveyed by Refinitiv.
Sony hiked its full-year profit forecast to 1.2 trillion yen from 1.04 trillion yen. That prediction is higher than an average 1.09 trillion yen profit forecast from 24 analysts, Refinitiv data showed.
The conglomerate – spanning areas such as entertainment, sensors and financial services – switched to IFRS accounting standards from U.S. GAAP in the current financial year.
Profit at its pictures business jumped by more than seven-fold to 149.4 billion yen, as revenue more than doubled.
Sales at the group’s pictures unit were also boosted by receipts from the “Venom: Let There Be Carnage” movie and licensing of the “Seinfeld” sitcom.
The sale of mobile gaming business GSN Games also boosted Sony’s profit.
Sony is benefiting from strong demand for its PlayStation 5 (PS5) games console which it launched in November 2020. A shortage of semiconductors, however, means it is struggling to produce enough consoles to meet that demand.
Sony said it sold 3.9 million PS5 units in the third quarter, which spans the key year-end shopping season, bringing told units sold to 17.3 million.
The group said last year it will spend 2 trillion yen over three years on strategic investments, including a push to expand subscribers to its gaming and entertainment services as it streamlines its consumer electronics business.
On Tuesday, the company announced it will buy Bungie Inc, the original creator of the “Halo” videogame, for $3.6 billion. That comes after XBox console maker Microsoft Corp said last month it will purchase “Call of Duty” maker Activision Blizzard for $69 billion.
The Japanese consumer tech company may also branch out into electric vehicles (EVs), with Chief Executive Kenichiro Yoshida unveiling a new EV prototype and announcing the creation of a mobility business at a tech trade show in Las Vegas last month.
Growing demand for EVs is spurring new entrants into auto markets. Through EVs, Sony is aiming to build a business that will transform cars from transportation machines to entertainment spaces.
Sony has said it will pick new partners for its EV project based on the technology they can bring. read more
In November chipmaker Taiwan Semiconductor Manufacturing Co said it had agreed to build a $7 billion chip plant in Japan that will supply Sony with semiconductors for its image sensor business from 2024.
Sony shares closed up 4.9% on Wednesday ahead of the earnings and have fallen 7.4% year-to-date. US News