Sony raised its earnings outlook on Wednesday after record first quarter operating profit helped by pandemic stay-at-home demand for PlayStation 5 consoles, TVs, music and movies.
Operating profit for the quarter ended June 30 increased to JPY 280.1 billion (approximately Rs. 18,970 crore) from JPY 221.7 billion (approximately Rs. 15,010 crore) a year earlier, topping 207 , 96 billion JPY (around Rs. 14,080 crore) expected within 10 analysts, data from Refinitiv Eikon showed.
It raised its profit forecast for the year through March 2022 to JPY 980 billion (around Rs. 66,360 crore) from JPY 930 billion (around Rs. 62,965 crore), bringing it closer to the average of 1 billion JPY (approximately Rs. 680 crores). estimate of 25 analysts.
Sony expected the growing pandemic demand for its devices and content to decline as coronavirus lockdowns ease, but with new waves of COVID-19[female[feminine infections sweeping the world, restrictions are still common.
These supply chain constraints could also affect the production of other consumer electronics devices, CFO Hiroki Totoki said at a press conference after Sony results.
“We use a lot of semiconductors and that’s a cause for concern,” Totoki said. “We cannot become complacent,” he added.
Sony in May said he expected to sell 14.8 million PS5 units this exercise. Launched in major markets in November 2020, the console, which sells for up to $ 500 (around Rs. 37,110 crore), quickly sold out.
Sony has secured enough chips to meet this production target, Totoki said.
Sony sees the game console as a way to connect its traditional consumer electronics devices to its growing content business by encouraging online game downloads and sign-ups for subscription services.
As it streamlines its consumer electronics business, Sony is strengthening its distribution and entertainment content businesses. In December, he agreed to buy AT&T animation company Crunchyroll with 3 million subscribers worldwide.
In June, he bought Housemarque, a Finnish games software maker.
However, higher production costs hurt profitability, the company said.
In May, the company indicated that it would continue to grow its content business through acquisitions when it announced that it would spend 2,000 billion yen over the next three years on strategic investments, including a push to increase the number of subscribers to its games and entertainment services.
In its financials division, Sony recorded a one-time loss of 16.8 billion yen (about Rs 1140 crore) from an unauthorized transfer of funds to a Bermuda subsidiary, SA Reinsurance, in May.
The company said it reported the payment to local authorities and attempted to recover the money.
© Thomson Reuters 2021