Sony Reports 22% Surge in Quarterly Profit, Raises Full-Year Guidance

Sony Group Corporation posted stronger-than-expected earnings for the three months ended December, overcoming a spike in memory chip prices that has weighed on its PlayStation hardware business. The company cited a favorable foreign-exchange environment and resilient demand in music and imaging solutions as key factors behind the improved performance.

Operating profit for the quarter reached 515 billion Japanese yen (approximately $3.3 billion), a 22 percent increase from the same period a year earlier and ahead of analyst projections compiled by LSEG SmartEstimates. Revenue edged up 1 percent to 3.71 trillion yen, also slightly above market expectations.

The Tokyo-based technology and entertainment group used the results to lift its full-year outlook. Sony now anticipates operating profit of 1.54 trillion yen for the fiscal year ending March, an 8 percent improvement on its prior forecast. Management also raised the company’s revenue target by 300 billion yen to 12.3 trillion yen, while keeping the estimated impact of U.S. tariffs at 50 billion yen.

In addition, the board approved an expansion of the ongoing share repurchase program. The cap on buybacks was lifted to 150 billion yen, up from 100 billion yen, with the initiative scheduled to run through May 2026.

Gaming Revenue Slips Amid Component Shortage

Sales in the Game & Network Services segment, Sony’s largest revenue contributor, totaled 1.613 trillion yen, down 68.7 billion yen from the prior-year quarter. While the unit continues to benefit from higher digital game downloads and subscription growth on PlayStation Plus, hardware shipments have been less robust.

The PlayStation 5 relies on conventional DRAM chips, supply of which has tightened as artificial-intelligence servers and data-center operators absorb a greater share of global production. Market researcher TrendForce expects contract prices for standard DRAM to rise 90 to 95 percent during the current quarter compared with the preceding three months, underscoring the cost pressures facing console manufacturers. (TrendForce report)

During an earnings call, Sony executives said the company intends to cushion the impact of higher component costs by deepening monetization of its existing PlayStation user base and expanding software and network-service revenue streams. No timeline was provided for potential hardware price adjustments.

Music and Imaging Segments Provide Balance

Sony’s diversified portfolio helped offset softness in gaming. Revenue in the Music segment advanced 12.6 percent year over year, supported by a rebound in live events, steady merchandising activity and continued growth in music-streaming platforms.

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The Imaging & Sensing Solutions unit, which designs semiconductor-based image sensors for smartphones and other devices, posted revenue growth of more than 20 percent. Management noted that most of the division’s sensors serve premium-tier handsets, a niche it expects to be less vulnerable to the broader memory shortage challenging entry-level and mid-range phone makers.

Currency Tailwinds Boost Bottom Line

Favorable exchange rates were another contributor to Sony’s quarterly performance. A weaker yen amplifies overseas earnings when they are repatriated, adding incremental support to operating income. The company did not quantify the currency impact but highlighted it as a meaningful factor in the year-on-year comparison.

Market Reaction

Sony shares initially traded higher following the earnings announcement but later surrendered gains, finishing the Tokyo session largely unchanged. Investors weighed the upbeat profit guidance and expanded buyback authorization against lingering concerns over supply-chain costs in the gaming division.

Analysts will monitor how aggressively Sony can grow its software and services ecosystem while navigating elevated memory prices. The company’s next set of results, covering the fiscal year ending in March, is expected to provide further clarity on its ability to maintain margins in a tightening component market.

Crédito da imagem: Kazuhiro Nogi / AFP / Getty Images