Sony Group Corp. raised its net profit forecast Wednesday for the fiscal year through March to ¥700 billion ($6.42 billion) on strong demand for music streaming services and digital cameras, beating expectations that sales of image sensors for mobile phones would fall.
The latest outlook compares with a net profit of ¥660 billion projected in April and represents a 32.0% drop from the previous year.
For the current business year, the Japanese electronics and entertainment giant now expects operating profit to increase 2.6% to ¥980 billion, up from its earlier forecast of ¥930 billion. The company left its sales estimate unchanged at ¥9.70 trillion, up 7.8%.
“The music streaming service, the biggest growth driver in the music segment, has been robust … and we aim to secure high profitability that outclasses our rivals,” said Chief Financial Officer Hiroki Totoki during an online briefing.
The company’s mirrorless cameras have seen a recovery in demand globally, Totoki said, as more people go shopping for new cameras, with progress in vaccinations.
But he also warned that electronics production could be disrupted in Southeast Asia, where COVID-19 infections are re-surging.
Global semiconductor shortages, which have significantly hit electronics and auto manufacturers since last year, “remain unpredictable,” Totoki also said, while adding that the impact on Sony’s PlayStation 5 game console and other products is “under control” for now as the company has diversified suppliers and piled up inventory.
Sony, an image sensor supplier for China’s Huawei Technologies Co., has seen slowing demand for the component in the country, with Totoki saying Sony will seek to diversify customers for the products.
For the first quarter through June, Sony’s net profit rose 9.4% from the same quarter last year to ¥211.83 billion on sales of ¥2.26 trillion, up 15.0%. Its operating profit came in at ¥280.07 billion, up 26.3%.
Sony has booked relatively strong earnings despite the pandemic, which has forced people to spend more time at home and seek entertainment by playing video games and subscribing to streaming services.
Sony’s net profit broke past the ¥1 trillion mark for the first time in the business year ended in March to a record ¥1.17 trillion.
PlayStation 5 has met robust demand since its November launch and Sony Group retained its fiscal 2021 sales target at 14.80 million units globally.
For the April to June period, Sony sold 2.3 million units but at a reduced pace compared with 3.3 million in the previous quarter.
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