Sony Group Corporation ( SONY Quick Quote SONY - Free Report) reported mixed second-quarter fiscal 2021 results, wherein the bottom line beat the Zacks Consensus Estimate but the top line missed the same. Net Income
On a GAAP basis, net income in the quarter decreased 53.5% year over year to ¥213.1 billion ($1,935.6 million) or ¥170.26 ($1.55) per share. The decline was mainly due to higher financial expenses and income tax. The bottom line beat the Zacks Consensus Estimate by 7 cents.
Adjusted net income came in at ¥209.2 billion compared with ¥254.4 billion in the prior-year quarter. Revenues
Quarterly total revenues increased 12.6% year over year to ¥2,369.4 billion ($21,523 million). The rise was driven by an increase in Game & Network Services (G&NS), Pictures, Music, and Electronics Products & Solutions (EP&S) segments sales. The top line, however, missed the consensus estimate of $21,958 million.
Segment Results G&NS sales grew 27.4% year over year to ¥645.4 billion, driven by a rise in sales of hardware, a positive impact of foreign exchange rates, and an increase in sales of non-first-party titles including add-on content. The segment’s operating income was ¥82.7 billion compared with ¥105.4 billion in the prior-year quarter. Music sales increased 17.6% year over year to ¥271.6 billion, driven by higher sales of recorded music and music publishing, an increase in revenues from paid subscription streaming services, and a rise in revenues from advertising-supported streaming services, which were affected by the pandemic in second-quarter fiscal 2020. Operating income was ¥50.6 billion, which declined from ¥54.3 billion in the prior-year quarter. Pictures sales increased 39.8% year over year to ¥260.7 billion. This was driven by higher sales of television productions, media networks, and motion pictures. Operating income was ¥31.6 billion compared with ¥32.8 billion a year ago. EP&S sales came in at ¥581.9 billion, up 9.1% year over year, driven by an increase in sales of smartphones and a positive impact of foreign exchange rates. Operating income was ¥72.7 billion compared with ¥53.4 billion in the year-ago quarter. Imaging & Sensing Solutions sales were down 9.4% year over year to ¥278.3 billion due to a decrease in sales of image sensors for mobile products. Operating income was ¥49.7 billion compared with ¥50.8 billion in the prior-year quarter. Financial Services sales were almost flat year over year at ¥368.4 billion, which reflects an increase in insurance premium revenues and a decrease in gains on investments. Operating income was ¥43.1 billion compared with ¥37 billion in the year-ago quarter. All Other sales were up 7% to ¥24.5 billion. Operating income was ¥8.6 billion compared with ¥1.5 billion a year ago. Other Details
Total expenses were ¥2,059.3 billion, up 14.9% year over year. Operating income was ¥318.5 billion, up 1%.
Cash Flow & Liquidity
During the first six months of fiscal 2021, Sony generated ¥317 billion of cash from operating activities compared with ¥600.9 billion in the prior-year period.
As of Sep 30, 2021, the company had ¥1,473.8 billion ($13,192 million) in cash and cash equivalents with ¥995.8 billion ($8,913.4 million) of long-term debt. FY21 Outlook Raised
Sony has provided the outlook for the fiscal year ending Mar 31, 2022. It now expects sales of ¥9,900 billion, increasing from the August forecast of ¥9,700 billion. Operating income is projected to be ¥1,040 billion, increasing from ¥980 billion. Net income is estimated to be ¥730 billion, up from ¥700 billion.
Zacks Rank & Stocks to Consider
Sony currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader sector are Ooma, Inc. ( OOMA Quick Quote OOMA - Free Report) , Ubiquiti, Inc. ( UI Quick Quote UI - Free Report) , and SeaChange International, Inc. ( SEAC Quick Quote SEAC - Free Report) . While Ooma sports a Zacks Rank #1 (Strong Buy), Ubiquiti and SeaChange carry a Zacks Rank #2 (Buy). You can see . the complete list of today’s Zacks #1 Rank stocks here Ooma delivered a trailing four-quarter earnings surprise of 55.2%, on average. Ubiquiti pulled off a trailing four-quarter earnings surprise of 20.5%, on average. SeaChange delivered a trailing four-quarter earnings surprise of 28.9%, on average. Conversion rate used: ¥1 = $0.009083 (period average from Jul 1, 2021 to Sep 30, 2021) ¥1 = $0.008951 (as of Sep 30, 2021)