Sony profits rise 346% thanks to strong performance from PlayStation gaming unit
- Sony reported fiscal second quarter earnings and revenue that beat forecasts
- Strong performance from the PlayStation gaming business and semiconductor division helped boost profits
- Sony also raised its dividend to 12.50 Japanese yen
Sony reported fiscal second-quarter earnings and revenue that beat forecasts thanks to a strong performance from its PlayStation gaming business, and said it expects its best profit since 1998.
The Japanese electronic giant reported the following numbers for the three months to September 30:
- Sales of 2.06 trillion Japanese yen ($18.2 billion) vs 1.86 trillion yen expected, according to Reuters data. This was also a 22.1 percent year-on-year rise.
- Operating profit of 204 billion yen vs 135.6 billion yen expected. This market a 346.4 percent rise.
Sony also raised its dividend in the second quarter to 12.50 Japanese yen from 10 Japanese yen.
The Japanese giant said it now expects operating income for the year ending March 31 to be 630 billion Japanese yen. If realized, this would be the highest ever profit for the company since its record-breaking year in 1998 when it earned 526 billion yen. During this period, Sony's first PlayStation console was proving very successful.
Sony's gaming and network services business saw operating revenue rise 35.4 percent year-on-year to 433.2 billion yen, with operating income hit 54.8 billion yen, marking a 188.3 percent rise.
PlayStation has been the crown jewel for Sony for a long time and the latest quarter was helped by increased game and hardware sales. Major game titles such as "FIFA 18" and "Unchartered: The Lost Legacy" were released during the quarter.
On Monday, the company also announced a number of new games coming out over the next couple of years. These included some virtual reality (VR) games. Sony released the PlayStation VR headset last year, and has since sold over 1 million units, making it the second-largest VR headset by market share, according to IDC.
Chips perform well
Under Chief Executive Kazuo Hirai, Sony has been on a turnaround path, slimming its struggling businesses while doubling down on the big profit drivers. PlayStation has been one of those. And so has the components business.
Sony's semiconductor business saw profit of 49.4 billion yen in the quarter, up from a 4.2 billion yen loss in same period a year before. The loss was due to an earthquake which hit production. Sony said that the increase in profit was due to increased sales of image sensors for mobile products which are used in some of the top smartphones around the world.
Sony shares were trading around 2.7 percent higher after the results and so far this year are up around 35 percent year-to-date.
The company's shares recently hit a nine-year high, but there are also questions about where the future growth will come from. Sony has been investing in areas such as VR and artificial intelligence (AI).
In an interview with CNBC last year, CEO Kazuo Hirai said he was confident that the company was still able to create "wacky" products to excited consumers.
"Sony is committed to making sure we innovate on both fronts - traditional products and also really new ideas, sometimes wacky ideas, but ideas that really wow our customers," Hirai said.
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