The headquarters of Sony Corp., in Tokyo, on May 10, 2022.Eugene Hoshiko/The Associated Press
Sony SONY-N said on Tuesday it sees its operating profit climbing 5 per cent this business year on robust demand for its image sensors even as it forecast lower sales for its PlayStation 5 console.
The Japanese entertainment and electronics conglomerate also said it would conduct a five-for-one stock split to expand its investor base and spend 250 billion yen ($1.6-billion) on a share buyback.
Operating profit is expected to come in at 1.28 trillion yen ($8.18-billion) in the year ending March.
Sony, a major supplier of image sensors for smartphones, said its chips business is expected to book a 40 per cent rise in operating profit on higher sales and lower costs.
At its gaming unit, revenues are expected to fall with the PlayStation 5 in its fourth year but Sony said user engagement and cost control could drive future profitability at the business.
It predicted PlayStation 5 sales will fall to 18 million units from last year’s 20.8 million, which was slightly below a revised 21 million target.
But profits are forecast to rise 7 per cent as the lower sales will mean smaller hardware losses and as it expects higher revenue from its PlayStation Plus subscription service.
Investors have been somewhat wary about prospects for the gaming unit which accounts for around a quarter of Sony’s overall profit as the sector experiences a slowdown.
Sony said in February it would lay off 900 workers at its gaming business and shutter a London studio and Xbox maker Microsoft last week moved to shutter studios including Tokyo-based Tango Gameworks in the latest cost-cutting measures.
In the year ended March, Sony recorded a 7 per cent fall in operating profit, hit by lower profits at its life insurance business. The result was in line with estimates.
It plans a partial spin-off of its financial unit with a listing in October 2025 in order to focus on its entertainment and chips units.
Sony’s shares, which have fallen around 11 per cent for the year to date, closed flat ahead of earnings.
Known as the inventor of the Walkman and the MiniDisc, Sony has transformed from an electronics manufacturer into an entertainment and technology juggernaut spanning movies, music, games and chips.
Sony Pictures last week sent a letter expressing interest in acquiring Paramount with private equity firm Apollo , Reuters reported.
A deal would create a formidable Hollywood studio with a share of around 20 per cent of the North American box office.
The planned buyback would purchase up to 2.46 per cent of its outstanding shares.