SONY's Q3 Earnings & Revenues Up Y/Y, View Raised on Market Demand

Sony Group Corporation SONY reported third-quarter fiscal 2024 net income per share (on a GAAP basis) of ¥61.82 (41 cents), up from ¥58.96 in the year-ago quarter. The Zacks Consensus Estimate was pegged at 29 cents. Adjusted net income came in at ¥373.7 billion compared with ¥363.9 billion in the prior-year quarter. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Quarterly total revenues increased 18% year over year to ¥4,409.6 billion ($29 billion). This increase was driven by strong growth in the Game & Network Services (G&NS), Music, Pictures and Financial Services segments though it was partially offset by a decline in Entertainment, Technology & Services (ET&S) and Imaging & Sensing Solutions (I&SS) segments. The Zacks Consensus Estimate was pegged at $24.3 billion.Sony has revised its forecast for the fiscal year ending March 31, 2025. It now expects sales of ¥13,200 billion, up from the previous guidance of ¥12,710 billion. The primary factor behind the elevation is growing momentum in the Financial Services and G&NS business sales. For Financial Services and G&NS, revenues are now expected to be ¥1,300 billion and ¥4,610 billion, respectively, compared with the earlier projection of ¥910 billion and ¥4,490 billion.Shares of SONY are up 5% in the premarket today. In the past year, the stock has gained 16.6% compared with the Audio Video Production industry’s rise of 12.9%.Image Source: Zacks Investment ResearchSegmental ResultsIn the quarter under review, G&NS sales were up 16% year over year to ¥1,682.3 billion. Sales growth was driven by higher hardware revenues from increased unit sales, along with a rise in non-first-party game software sales, including add-on content. Positive forex impact bodes well. Operating income rose to ¥118.1 billion from ¥86.1 billion in the prior-year quarter due to the positive impact from increased sales in network services and growth in non-first-party game software sales. Reduced losses from hardware further supported performance, partially offset by a decline in first-party game software sales.Music sales improved 14% year over year to ¥481.7 billion in the fiscal third quarter on the back of higher revenues from streaming services in Recorded Music and Music Publishing. The positive impact from the consolidation of ePlus Inc. within Visual Media & Platform and favorable forex movement cushioned the uptick. Operating income was ¥97.4 billion, up from ¥76.1 billion in the prior-year quarter due to an increase in Recorded Music and Music Publishing sales.Pictures sales grew 9% year over year to ¥398.2 billion. The upside was driven by healthy revenues from theatrical releases in the current fiscal year, synergy stemming from the acquisition of Alamo Drafthouse Cinema and higher revenues for Crunchyroll due to paid subscriber rise. Fewer series deliveries in Television Productions and lower licensing revenues from catalog titles in Motion Pictures acted as headwinds. Operating income was ¥34 billion compared with ¥41.6 billion a year ago due to increased marketing expenses for theatrical releases.ET&S sales totaled ¥704.5 billion, down 4% year over year, due to a decline in television sales driven by lower unit sales amid forex tailwinds. Operating income was ¥77.1 billion compared with ¥77.2 billion in the year-ago quarter. Sony Corporation Price, Consensus and EPS Surprise Sony Corporation price-consensus-eps-surprise-chart | Sony Corporation Quote I&SS sales remained almost flat year over year at ¥500.9 billion. Despite positive forex rates, soft sales of image sensors for mobile products and lower unit sales hampered growth in this segment. Operating income was ¥97.5 billion compared with ¥99.7 billion in the year-ago quarter owing to higher manufacturing costs.Financial Services sales skyrocketed 130% year over year to ¥718.5 billion. The expansion is driven by substantial revenue growth at Sony Life, along with a positive impact from higher net gains on investments due to market volatility in both the general and separate accounts. Operating income came in at ¥46.4 billion compared with ¥77.3 billion in the year-ago quarter. The downtick was caused by a sharp decline in operating income at Sony Life and the negative impact of worsening net gains and losses due to market fluctuations, primarily affecting minimum guarantees for variable life insurance.All Other sales were up 8% to ¥25.8 billion in the fiscal third quarter. Operating loss was ¥3 billion against ¥2.6 billion of operating income in the year-ago quarter.Other DetailsFor the quarter under review, total costs and expenses were ¥3,936.1 billion, up 19.7% year over year. Operating income was ¥469.3 billion, rising 1.3%.Cash Flow & LiquidityFor the nine months ended on Dec. 31, 2024, Sony generated ¥1,624 billion of cash from operating activities compared with ¥932 billion in the prior-year period.As of Dec. 31, 2024, the company had ¥2,492 billion in cash and cash equivalents with ¥1,993 billion of long-term debt.Fiscal 2024 Outlook TweakedSONY updated guidance for I&SS and Music segments. For I&SS, revenues are expected at ¥1,790 billion compared with the earlier forecast of ¥1,770 billion. For Music, revenues are expected at ¥1,790 billion compared with the earlier forecast of ¥1,740 billion.Net income is estimated to be ¥1,080 billion and operating income is expected to be ¥1,335 billion. Earlier, net income was expected to be ¥980 billion and operating income was projected to be ¥1,310 billion.SONY’s Zacks RankSony currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Recent Performance of Other CompaniesSensata Technologies Holding plc ST reported fourth-quarter 2024 EPS of 76 cents compared with 81 cents a year ago. The bottom line met the Zacks Consensus Estimate.In the past year, shares of ST have lost 20.2%.BCE Inc. BCE reported fourth-quarter 2024 adjusted EPS of C$0.79 (56 cents) compared with C$0.76 in the prior-year quarter. The Zacks Consensus Estimate was pegged at 50 cents.Shares of BCE have plunged 38.3% in the past year. PTC Inc PTC reported first-quarter fiscal 2025 non-GAAP EPS of $1.10, beating the Zacks Consensus Estimate by 20.9%. The company reported non-GAAP EPS of $1.11 in the prior-year quarter. In the past year, shares of PTC have declined 5.5%. Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sensata Technologies Holding N.V. (ST): Free Stock Analysis Report BCE, Inc. (BCE): Free Stock Analysis Report PTC Inc. (PTC): Free Stock Analysis Report Sony Corporation (SONY): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks