Sony raises profit forecast after earnings beat, boosted by Music and Imaging divisions

Sony Group on Tuesday reported an increase in its second-quarter operating profit that beat expectations, while announcing a share buyback of up to 100 billion Japanese yen ($648 million).

Here are Sony’s second-quarter results compared with LSEG SmartEstimates, which are weighted toward forecasts from analysts who are more consistently accurate: 

Revenue: 3.108 trillion Japanese yen vs. 2.985 trillion yen expectedOperating profit: 429 billion yen vs. 398.44 billion yen expected

Sony’s operating profit jumped 10% compared to the same period last year, while revenues were up 5% 

The Japanese technology giant said it now expects operating profit for its fiscal year to increase by 100 billion yen, or 8% above its previous forecast, driven by gains from its Imaging & Sensing Solutions and Music segments. The company also raised its annual revenue outlook by 300 billion yen, or 3%. 

That came as Sony saw strength in its game and network services division, which houses its popular PlayStation home console brand. Representing Sony’s top revenue driver, the division posted sales of 1.113 trillion yen, up 3.9% year over year.

Game and network services have performed well in recent quarters thanks to a shift to digital game purchases and the PlayStation Plus subscription service. Growth in hardware shipments has been comparably muted.

The company also saw substantial growth in its music business — its second-largest segment — with sales up over 20% from the same period last year. Revenue from its Imaging & Sensing Solutions business also grew 14.75%.

Despite the strong showing, its picture business sales shrank about 2.75% year over year. That was despite Sony Pictures Animation being behind this year’s smash hit production, KPop Demon Hunters, which premiered on June 20. 

The film, which was produced by Sony, has reportedly become the most popular Netflix film ever, and continues to break streaming records, even for its original soundtrack. 

Despite the success, Sony has missed much of this upside due to selling the film’s exclusive rights to Netflix.

While the exact details of the deal are unknown, it was reported that Sony made an initial $25 million profit from producing the film for Netflix.

Netflix saw KPop Demon Hunters drive significant viewership and even contribute to its 17% revenue jump in its September quarter.

However, in a bright spot for Sony, a sequel to the movie has already been confirmed, with Netflix reportedly providing the Japanese company a $15 million cash bonus for the first film’s performance.