Shares of Sony Group Corporation surged over 8% on Thursday after the Japanese multinational conglomerate raised its full year outlook for 2024 following strong sales growth in the gaming and music divisions during its third quarter, despite being dragged down by the weaker performance of Sony Pictures Entertainment.
The revised forecast now expects total sales of 13.2 trillion yen ($86 billion), operating profit of 1.34 billion yen ($8.7 million) and net income of 1.8 trillion yen ($12 billion), up 4%, 2% and 10% from the previous guidance, respectively.
Here are the top-line results:
Revenue: 4.41 trillion yen ($29 billion), up 18% year over year. Analysts surveyed by Zacks Investment Research were expecting revenue of $24.32 billion.
Earnings per share: 41 cents, compared to 29 cents per share expected by analysts surveyed by Zacks.
Net income: 373.7 billion yen ($2.44 billion), up 3% year over year
Total operating income: 469.3 billion yen ($3.06 billion), up 1% year over year
Gaming, Music boost Sony revenue
Sony’s gaming division saw sales growth of 16% year over year to 1.68 trillion yen ($11 billion), driven by increases in sales of PlayStation consoles and non-first-party game titles, including add-on content. Operating income for the segment grew 37% to 118 billion yen ($770 million), driven by increased sales from network services and non-first-party game titles, offset by losses from hardware and lower sales of first-party game titles.
Monthly active users across PlayStation platforms hit a record 129 million accounts, while total play time grew 2% year over year. More than 40% of users who purchased a PS5 during the quarter were new users.
Meanwhile, the music division’s sales grew 14% year over year to 481.7 billion yen ($3.14 billion), driven by higher revenue from streaming services in recorded music and publishing and consolidation of its eplus inc. ticketing platform. Operating income for the segment climbed 28% to $97.4 billion yen ($630 million).
Looking ahead, gaming division are is expected to see sales growth of 3% to 4.61 trillion yen ($30 billion) and operating income growth of 7% to 380 billion yen ($2.48 billion) for the full year, while the music division will see sales growth of 3% to 1.79 trillion yen ($11.6 billion) and operating income growth of 3% to 340 billion yen ($2.2 billion).
Sony Pictures weighed down by higher marketing costs, lower TV deliveries
Sony Pictures Entertainment saw operating profit fall 18% to 34 billion yen ($220 million), impacted by higher marketing costs for theatrical releases and weaker licensing revenues for catalog titles.
Revenue increased 9% increase to 398.2 billion yen ($2.6 billion), driven by higher theatrical release revenue from “Venom: The Last Dance,” higher Crunchyroll revenues from subscriber growth and the impact of its Alamo Drafthouse acquisition, offset by lower series deliveries for its TV productions.
Sony said that the impact from the Los Angeles wildfires would be “minor” and that production of new TV shows, which was impacted by 2023’s Hollywood strikes, has “almost stabilized.” On the motion picture side, the company has postponed the theatrical releases of the next Spider-Man and Jumanji movies, citing lingering impact from the strikes.
The full year forecast for SPE remains unchanged from its previous guidance outlined in November.
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