TOKYO – On Wednesday, Sony booked a 10% rise in operating profit in the April-June quarter, beating analyst estimates, boosted by its industry-leading image sensor business.
Profit at the Japanese tech and entertainment conglomerate was 279 billion yen ($1.90 billion), compared with an average estimate of 275 billion yen from seven analysts polled by LSEG.
The impact of foreign exchange and higher sales helped profit at the image sensor business, a major supplier for smartphone makers, roughly triple to 36.6 billion yen.
A sprawling group encompassing music, movies, games, and chips, Sony hiked its full-year profit forecast by 3% aided by foreign exchange rates.
Financial markets have been whipsawed in recent days following an interest rate hike by the Bank of Japan and weak labor data from the U.S. that stoked recession fears.
“We are extremely concerned about the sudden fluctuations in exchange rates and the possibility of economic downturn, particularly in the United States,” Sony President Hiroki Totoki told an earnings briefing.
The rise in the yen has left investors reassessing the outlook for Japanese multinationals, as the weak currency had provided a cushion for many heavyweight exporters.
Sony’s assumed exchange rate for the year is approximately 145 yen to the dollar. On Wednesday, it was trading around 147, but it had been at 38-year lows near 162 at the start of July.
In the first quarter, Sony sold 2.4 million PlayStation 5 (PS5) units, fewer than a year earlier, but booked a larger profit from its games business.
In May, the group expects to sell 18 million PS5 units this fiscal year, compared to 20.8 million a year earlier.
The games industry is grappling with rising costs and weak pricing power. Last week, Sony-owned developer Bungie announced it is cutting almost a fifth of its workforce.
Profit at Sony’s music division grew 17% to 85.9 billion yen but fell 29% to 11.3 billion yen at its movies business.
Sony’s shares closed flat ahead of earnings and are down 8% year-to-date, giving the company a market capitalization of just over $100 billion.
($1 = 147.0100 yen)
(Source: ReutersReuters)
