Sony Group Corp. nudged up its fiscal-year profit outlook after the weaker yen bolstered sales of image sensors used in Apple Inc.’s premium iPhones.
(Bloomberg) — Sony Group Corp. nudged up its fiscal-year profit outlook after the weaker yen bolstered sales of image sensors used in Apple Inc.’s premium iPhones.
The Tokyo-based company raised its operating profit outlook to 1.16 trillion yen ($7.8 billion), matching average analyst estimates and up from its previous forecast of 1.11 trillion yen. The Japanese entertainment group reported on Tuesday an operating profit of 344 billion yen in the July-September quarter, against the consensus forecast of 280.7 billion yen.
The weak yen lifted sales of Sony’s image sensors, used in iPhones and other smartphones and which the company makes in Japan but mostly sells overseas. Bloomberg News reported stronger-than-expected sales of the premium iPhone 14 Pro and 14 Pro Max, which use more cameras than the base models and require more sensors. Demand for high-end handsets remains strong, despite weakening momentum for entry-level versions, according to smartphone component suppliers such as Murata Manufacturing Co.
Sony cut its annual forecast for its games segment, saying it now expects it to log a profit of 225 billion yen, down from 255 billion yen. While shortages of PlayStation 5 consoles are easing as Covid-related chip and logistics snarls end, the war in Ukraine and tightening monetary policy had been constraining overall demand for games and other leisure items. Sony sold 3.3 million PS5 units in its fiscal second quarter, the same as the previous year, betraying hopes of a takeoff in demand on its flagship console.
The gaming division sold fewer physical software copies this year with 62.5 million units, down 18% from the same quarter a year ago. PS Plus subscribers dipped to 45.4 million from 47.3 million in the prior quarter.
“Performance of Sony’s two major pillars, games and image sensors, was bad and masked by the weak yen,” said Hideki Yasuda, an analyst at Toyo Securities. “Image sensor sales are likely to fall as demand from Chinese smartphones is falling. PlayStation software sales continued to be lackluster and still-declining PlayStation Plus subscriber numbers are concerning.”
Sony said its music publishing business, as well as its box office films and TV dramas, continued to generate steady revenue. Both divisions got full-year profit forecast raises.
(Updates with analyst comment)
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