Sony Corp. raised its outlook for the current fiscal year, thanks to robust sales of the PlayStation console and a stake in recently listed Spotify Technology SA.
Net income will be 500 billion yen ($4.5 billion) on sales of 8.6 trillion yen through next March, the Tokyo-based company said. The prior forecast called for 480 billion yen and 8.3 trillion yen. Sony cited higher-than-anticipated game sales for the revenue revision, while the recent market debut of the music-streaming service added cash to the bottom line.
The company also reported a strong June quarter, with operating profit of 195 billion yen sharply exceeding average projections for 145.4 billion yen. That should come as a relief to investors, who were caught flat-footed in April when new Chief Executive Officer Kenichiro Yoshida unveiled a pessimistic full-year forecast, sending shares tumbling. The stock has recovered since as investors grew more optimistic about Sony’s prospects.
The PlayStation unit was again the standout. Its revenue climbed 36 percent during the quarter and operating profit nearly quintupled, riding stronger-than-expected sales of new games including God of War and Detroit: Become Human. More titles were also sold digitally through its PlayStation Network, which generates higher profit margins than through brick-and-mortar stores.
That gave Sony confidence to bump its expectations for the gaming division’s full-year revenue by 15 percent, and raise the outlook for operating profit by 32 percent. It also raised its forecast for PS4 unit sales to 17 million from 16 million.
“Games are doing even better than the analysts’ consensus,” said Masahiko Ishino, an analyst at Tokai Tokyo Securities. “There isn’t one big surprise from all this, but at the end of the day it’s a fairly strong result.”
Revenue rose 5.1 percent to 1.95 trillion yen, topping the forecast for 1.87 trillion yen.
In April, the company sold about a fifth of its stake in Spotify when the music streaming giant went public. Sony recorded a one-time gain of 53.9 billion yen from the sale. The remaining shares have a fair value of 95.3 billion yen, and Sony hasn’t said if or when it could sell its remaining holding.