Profits for the Japanese tech giant fell 29%

Sony said Thursday that operating profit fell 29% in its fiscal second quarter as the Japanese electronics giant faced weakness in its image sensor – or chip – business..

Here’s how Sony fared against LSEG’s consensus estimates in the September quarter:

• Revenue: 2.8 trillion yen ($18.5 billion), versus 2.87 trillion yen expected. This represents a year-on-year growth of 8%.
• Operating profit: 263 billion Japanese yen versus 304.4 billion yen expected. This represents a 29% year-on-year decrease.

Sony attributed the sharp decline in profits to weakness in its imaging sensor business, as well as declining profits in its financial services and entertainment, technology and services businesses.

The company said profits in its chip division fell more than 28 percent in the fiscal second quarter.

Sony supplies camera chips to consumer technology makers like Apple, which use semiconductors in iPhone computers.

Despite the profit slide, the company raised its sales forecast for the full year and said it now expects total sales of 12.4 trillion yen (from an earlier estimate of 12.2 trillion yen) as it benefits from positive foreign exchange rates.

The Japanese yen has weakened significantly against the dollar, and Sony makes most of its revenue outside the US.

Sony said it upgraded its revenue forecast due to expected strong performance in its video game, music and imaging and solutions businesses.

Sony is expecting its gaming and network services business, which is responsible for the popular PlayStation console, games studios and game networks, to achieve better-than-expected sales for the full year, boosting its performance.

The company has seen a strong start to its newly released Marvel’s Spider-Man 2 game, which is exclusive to the PS5. The game sold more than 2.5 million copies in its first 24 hours, making it the fastest-selling Play Studios game in history over a 24-hour period.

Sony said it sold 4.9 million PlayStation 5 units in the fiscal second quarter, compared with 3.3 million units sold in the fiscal first quarter.

The company announced on its earnings call that the PlayStation 5 console will be released in 2018. It said it expects to hit its target of 25 million units shipped by 2023. This is a milestone as analysts and investors have been closely watching the performance of the Sony PS5.

Sony’s results come after Nintendo reported better-than-expected sales and profit on Tuesday for its fiscal second quarter earlier this week, thanks to the “Super Mario Bros. Movie” and the highly anticipated May release of “The Legend of Zelda: Tears of the Kingdom” game.

In an interview, Sony’s Eric Lempel said that this will mark the first year the PS5 is “fully stocked” after supply chain shortages plagued the company in 2020 and 2021.

“We started. [PS5] In the year In 2020,” Lempel told CNBC. “We’ve suffered from the same supply chain issues that everyone else faces. Unfortunately, we were unable to deliver the PS5 to a consumer who wanted it.

Sony reported revenue growth of 33 percent year-on-year to 3 trillion Japanese yen, while profit fell 31 percent year-on-year to 253 billion yen following the fiscal first quarter.

The company cited weakness in its financial services and picture divisions at the time, a slight setback on the back of a strike by the Writers Guild of America and other unions, which opposed film scripts using artificial intelligence.

Sony said it expects the strike to have an impact on its next financial year, but the company is taking cost control measures to reduce it.