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Factors to Take Note Ahead of Sony's Q4 Earnings Release

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Sony Group Corporation (SONY - Free Report) is scheduled to report fourth-quarter fiscal 2021 results on May 10.

The Zacks Consensus Estimate for earnings is pegged at 82 cents per share, up 1.2% on a year-over-year basis. The consensus mark for revenues is pegged at $20.82 million, suggesting a decline of 0.7% from the prior-year quarter’s levels.

The company surpassed the Zacks Consensus Estimate in the last four quarters. It has a trailing four-quarter earnings surprise of 51.4%, on average. In the past year, shares of the company have lost 12.5% of their value compared with the industry’s decline of 15.2%.

Factors at Play

The Japan-based company is expected to have gained from strong momentum seen in the Music, Pictures, Imaging & Sensing Solutions and Financial Services segments.

Sony Corporation Price and EPS Surprise

 

Sony Corporation Price and EPS Surprise

Sony Corporation price-eps-surprise | Sony Corporation Quote


The Imaging & Sensing Solutions segment is expected to have gained from higher sales of image sensors for mobile products and improved product mix. The Music segment is likely to have gained from a rise in sales of recorded music and visual media and platform. Moreover, increased revenues from paid subscription streaming and advertising-supported streaming services might have acted as tailwinds.

The Pictures segment is likely to have gained from a rise in sales for media networks resulting from the Crunchyroll acquisition and television productions.

The company’s Game & Network Services Segment is likely to have been affected due to lower hardware, peripheral sales and non-first-party titles sales, including add-on content and weak sales of first-party titles. The Electronics Products & Solutions Segment is likely to have been affected by lower sales of audio and video, smartphones and digital cameras. However, improvement in sales of televisions due to an improvement in the product mix is likely to have acted as a tailwind.

Global supply chain troubles and component shortages along with inflationary pressure may have acted as headwinds.

Key Q4 Developments

During the quarter, Sony’s subsidiary, Sony Interactive Entertainment (“SIE”), announced its intent to acquire video game developer — Bungie — in a deal worth $3.6 billion. With the acquisition of Bungie, SIE will gain first-hand access to the video game developer’s broad library of live game services and technology expertise of nearly three decades, thereby augmenting SIE’s reach to avid gamers across the globe. The landmark consolidation deal will see Bungie join Sony’s PlayStation family. Thanks to Bungie’s state-of-the-art knowledge in multi-platform development, Sony is now well-positioned to compete with Activision’s first-person shooter video game series — Call of Duty. The deal will complement the long-term vision of both entities by fortifying the Japan-based conglomerate’s network of in-house gaming studios to tackle cash-rich rivals and empower Bungie to become a global multimedia entertainment company.

Sony collaborated with Niantic, Inc in the area of auditory augmented reality (AR) for headphones. Through this agreement, Sony aims to implement a gaming experience through headphones that feature auditory AR rather than just visual.

Sony and Honda signed a memorandum of understanding to establish a joint venture ("New Company") that aims to create a new era of mobility and mobility services. The companies plan to engage in the joint development and sales of battery electric vehicles and provide mobility services.

What Our Model Says

Our proven model does predict earnings beat for Sony this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Sony has an Earnings ESP of +12.96% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Camtek (CAMT - Free Report) has an Earnings ESP of +1.73% and currently has a Zacks Rank #2. Camtek is scheduled to report earnings results on May 12. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Camtek’s to-be-reported quarter’s earnings and revenues is pegged at 43 cents per share and $76.7 million, respectively. Camtek surpassed earnings estimates in the preceding four quarters, delivering an average surprise of 10%. Shares of CAMT have declined 4.4% in the past year.

Wix (WIX - Free Report) has an Earnings ESP of +15.09% and currently carries a Zacks Rank of 2. Wix is set to announce quarterly figures on May 16.

The Zacks Consensus Estimate for Wix’s to-be-reported quarter’s earnings and revenues is pegged at a loss of 64 cents per share and $340.1 million, respectively. Wix surpassed earnings estimates in the preceding four quarters, delivering an average surprise of 20%. Shares of WIX have lost 74.2% in the past year.

Arlo Technologies (ARLO - Free Report) has an Earnings ESP of +33.33% and currently carries a Zacks Rank #3. Arlo is slated to release quarterly numbers on May 10.

The Zacks Consensus Estimate for Arlo’s to-be-reported quarter’s earnings and revenues is pegged at a loss of 3 cents per share and $114.85 million, respectively. ARLO surpassed earnings estimates in the preceding four quarters, delivering an average surprise of 108.8%. Shares of ARLO are up 10.5% in the past year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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