Sony Group Corp. said it will buy back up to ¥200 billion ($1.8 billion) of its own shares after reporting quarterly profit below expectations.

Operating profit in the March quarter was ¥66.5 billion, versus the ¥74 billion consensus among analysts. The company sold 3.3 million PlayStation 5 consoles in the period, tallying 7.8 million for the fiscal year for a slightly faster pace than with the previous hardware generation.

Chief Financial Officer Hiroki Totoki said the company aims to sell more than 14.8 million units in the current year, but warned that a production bottleneck affecting the device will persist.

“Our initial PS5 sales goal this fiscal year is to surpass what the PS4 did in its second year,” Totoki said in a conference call after results.

The electronics giant presented a conservative outlook for the year ending 2022, forecasting operating income of ¥930 billion, with its tentpole businesses of gaming, music and image sensors expected to shrink. Operating income for the year just ended was ¥971.9 billion.

Sony saw game sales supercharged in the past year by stay-at-home demand and set new highs for subscriber additions to the PlayStation Plus service. But it’s struggled with a components shortage that’s hampered production of its latest console, which launched in November. Market trackers like Japan’s Famitsu have reported that the vast majority of Sony’s gaming revenue is still coming from games on the predecessor PlayStation 4.

Sony’s shares have surged since a trough in March 2020, propelled by the increase in gaming and mobile activity. They rose 3.1% ahead of the earnings on Wednesday. The company plans to buy back up to 2.02% of its stock with the money it has set aside.

“Revenue from the PlayStation business as well as the music segment’s smartphone games missed a consensus of analysts who thought the stay-at-home demand would have propelled these business more,” said Hideki Yasuda, an analyst at Ace Research Institute.

The group’s image-sensor division got a boost from the successful launch of Apple Inc.’s latest iPhone generation despite the loss of Huawei Technologies Co. as another high-volume client.

Smartphone sales have staged a rapid recovery, especially in Huawei’s home turf of China, but the new winners are companies like Oppo and Vivo, who might not necessarily spend as much on components. Xiaomi Corp.’s latest flagship Android device, the Mi 11 Ultra, is built around a Samsung camera sensor, illustrating rising competition in a sector Sony has traditionally dominated.

“The outlook suggests business with Oppo, Vivo and Xiaomi isn’t enough to cover the hole left by Huawei,” said Kazunori Ito of Morningstar Research. “What they are buying may not be as lucrative for Sony” as the premium-tier hardware Huawei was purchasing.

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