- Sony reported a 29% decline in second-quarter operating profit as the company suffered from weakness in its image sensor business.
- Sony attributed the significant profit decline to weakness in its image sensor business as well as profit declines in its financial services and entertainment, technology and services divisions.
- The company said in its earnings release that it expects its PlayStation 5 console to reach its goal of 25 million units shipped in 2023.
The PlayStation DualSense controller and the PlayStation 5 console.
Jakub Porzycki | Photo only | Getty Images
Sony on Thursday reported a 29% fall in operating profit in its second fiscal quarter as the Japanese electronics giant suffered from weakness in its image sensor – or chip – business.
Here’s how Sony performed in the September quarter compared to LSEG’s consensus estimates:
- Revenue: 2.8 trillion yen ($18.5 billion) vs. 2.87 trillion yen expected. This corresponds to an increase of 8% compared to the previous year.
- Operating profit: 263 billion Japanese yen versus expected 304.4 billion yen. This represents a decrease of 29% compared to the previous year.
Sony attributed the significant profit decline to weakness in its image sensor business as well as declines in profits in its financial services and entertainment, technology and services businesses.
The company said its chip division’s profit fell more than 28% in the second fiscal quarter.
Sony supplies camera chips to entertainment technology makers like Apple, which uses its semiconductors in its iPhones.
Despite the profit decline, the company raised its full-year sales forecast and said it now expects total sales of 12.4 trillion yen (versus previous forecasts of 12.2 trillion yen) as it benefits from positive foreign exchange rates.
The Japanese yen has depreciated significantly against the dollar and Sony generates most of its revenue outside the United States
Sony also attributed the improvement in its revenue forecast to expected top performance in its video games, music and imaging and sensor solutions businesses.
Sony expects its gaming and network services business, which is responsible for its popular PlayStation console, game studios and gaming networks, to generate higher-than-expected full-year revenue, leading to improved performance.
The company has seen a strong launch of its newly released game Marvel’s Spider-Man 2, exclusive to PS5. The game sold more than 2.5 million copies in the first 24 hours, making it the fastest-selling PlayStation Studios game in history in 24 hours.
Sony said it sold 4.9 million PlayStation 5 units in its second fiscal quarter, up from 3.3 million units sold in its first fiscal quarter.
The company said in its earnings release that it expects its PlayStation 5 console to reach its goal of 25 million units shipped in 2023. This is an important milestone as analysts and investors watch closely for signs of Sony’s PS5 performance.
Sony’s results come after Nintendo on Tuesday reported better-than-expected fiscal second-quarter sales and profits earlier this week, as the company was boosted by the “Super Mario Bros. Movie” and the highly anticipated release of “The Legend of.” Zelda: Tears of the Kingdom game received a boost in May.
In an interview, Sony’s Eric Lempel said this is the first year the PS5 will be “fully stocked” after the company struggled with shortages in 2020 and 2021 due to supply chain shortages.
“We have started [PS5] “We had the same supply chain issues as everyone else in 2020,” Lempel told CNBC. Unfortunately, we were unable to deliver a PS5 to any consumer who wanted a PS5.”
Thursday’s results follow a fiscal first quarter in which Sony reported a 33% year-on-year rise in revenue to 3 trillion Japanese yen, but a 31% year-on-year profit decline to 253 billion yen.
At the time, the company cited weakness in its financial services and imaging divisions, which were experiencing a slight slump due to strikes by the Writers Guild of America and other unions protesting the use of artificial intelligence to create movie scripts.
Sony said it expects the strike to impact its next fiscal year, but the company is taking cost control measures to minimize them.