Sony Corp. boosted its earnings outlook on Wednesday after a record first-quarter operating profit, which helped boost demand for a home stay for PlayStation 5 consoles, TVs, music and movies.
Operating profit for the quarter ended June 30 rose to 280.1 billion yen ($ 2.57 billion) from 221.7 billion yen a year earlier, up from 207.96 billion yen expected by 10 analysts. data from Refinitiv Eikon.
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It raised its earnings forecast for the year to March 2022 to 980 billion yen from 930 billion, approaching an average of 1 billion yen by 25 analysts.
Sony expected that the growing demand for pandemics for its devices and content would decrease as lockdowns were reduced, but with new waves of Covid-19 infections sweeping the world, restrictions are still commonplace.
However, the lack of semiconductors, which also affects Apple companies, means that it cannot produce enough PlayStation game consoles to meet demand.
These supply chain constraints could also affect the production of other consumer electronics devices, Chief Financial Officer Hiroki Totoki told a news conference following Sony’s results.
“We use a lot of semiconductors and it is a source of concern,” Totoki said. “We can not be complacent,” he added.
Sony said in May that it expects to sell 14.8 million PS5 units this fiscal year. Released in the major markets in November 2020, the console, which sells for up to $ 500, sold out quickly.
Sony has secured enough chips to meet this production target, Totoki said.
Sony sees the game console as a way to connect traditional consumer electronics with the growing content activity, encouraging online gaming and subscription subscriptions.
As it streamlines its business in consumer electronics, Sony is stepping up its entertainment and distribution business. In December, it agreed to buy AT & T Inc cartoon company Crunchyroll with 3 million subscribers worldwide.
In June it bought Housemarque, a Finnish game software maker. I
Sony is also increasing movie offerings on streaming services offered by Walt Disney Co. and Netflix as the pandemic delays movie releases.
Higher production costs, however, reduced profitability, the company said.
In May, the company said it would continue to expand its content business through acquisitions, when it said it would spend 2 trillion yen over the next three years on strategic investments, including pushing to expand subscribers to gaming and entertainment services.
In its financial division, Sony recorded a one-time loss of 16.8 billion yen from an unauthorized transfer of funds to a Bermuda subsidiary, SA Reinsurance, in May.
The company said it reported the payment to local authorities and was trying to recover the money.