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Sony Group Corporation (SONY - Free Report) reported first-quarter fiscal 2023 net income per share (on a GAAP basis) of ¥175.67 ($1.28) per share, decreasing from ¥209.66 reported in the year-ago quarter. The Zacks Consensus Estimate for earnings was pegged at 94 cents. Adjusted net income came in at ¥217.5 billion compared with ¥261.1 billion in the prior-year quarter.
Quarterly total revenues increased 33% year over year to ¥2,963.7 billion ($16.64 billion). The uptick was due to an increase in revenues in Game & Network Services (G&NS), Music, Imaging & Sensing Solutions and Financial Services business segments’ sales. The Zacks Consensus Estimate for revenues was pegged at $18.62 billion.
The company has adopted IFRS 17 “Insurance Contracts” (IFRS 17) from the first quarter of fiscal 2023. As a result, figures for first-quarter fiscal 2022 and fiscal 2022 are restated in accordance with IFRS 17.
Sony Corporation Price, Consensus and EPS Surprise
In the quarter under review, G&NS sales were up 28% year over year to ¥771.9 billion. Sales in the segment increased owing to positive impacts of forex movement, higher sales of first-party titles and improving hardware sales. Operating income fell to ¥49.2 billion from ¥52.8 billion in the prior-year quarter mainly due to increasing costs (associated with acquisitions like Bungie).
Music sales increased 16% year over year to ¥358.2 billion in the fiscal first quarter on the back of higher recorded music and music publishing sales from paid-subscription streaming services. Operating income was ¥73.4 billion, up from ¥61 billion in the prior-year quarter.
Pictures sales declined 6% year over year to ¥320.4 billion mainly due to lower deliveries of the U.S. television series. Operating income was ¥16 billion compared with ¥50.7 billion a year ago. Operating income was affected by a decline in sales and higher marketing costs.
ET&S sales totaled ¥571.8 billion, up 4% year over year. The top-line performance was driven by higher sales of digital cameras and positive impacts of forex movement. Operating income was ¥55.6 billion compared with ¥53.6 billion in the year-ago quarter.
Imaging & Sensing Solutions sales rose 23% year over year to ¥292.7 billion. Operating income was ¥12.7 billion compared with ¥21.7 billion in the year-earlier quarter. Operating income was affected by higher manufacturing costs, depreciation and amortization expenses, and research and development expenditures.
Financial Services sales jumped 215% year over year to ¥681.4 billion. The uptick was driven by increases in revenues at Sony Life, and improvement in net gains and losses on investments in separate accounts. Operating income came in at ¥54.5 billion from ¥139.2 billion in the previous-year quarter.
All Other sales were up 1% to ¥19.5 billion in the fiscal first quarter. Operating income was ¥2.5 billion compared with ¥2.9 billion in the year-ago quarter.
Other Details
For the quarter under review, total costs and expenses were ¥2,715.3 billion, up 45.2% year over year. Operating income was ¥253 billion, down 30.6%.
Cash Flow & Liquidity
For the fiscal first quarter, Sony used ¥12.7 billion of cash from operating activities compared with ¥430 billion in the prior-year quarter.
As of Jun 30, 2023, the company had ¥1,532 billion in cash and cash equivalents with ¥1,807 billion of long-term debt.
Fiscal 2023 Outlook
Sony has revised its outlook for the fiscal year ending Mar 31, 2024. It now expects sales of ¥12,200 billion compared with the earlier guidance of ¥11,500 billion. The top-line performance is expected to be driven by strengthening momentum in GN&S, Music, and ET&S segment sales.
However, the company has lowered its revenue guidance for Pictures, and I&SS segments. Pictures’ revenues has been revised downward mainly due to negative impacts of strike conducted by WGA and SAG-AFTRA. This is expected to delay release dates for some theatrical releases in Motion Pictures and deliveries of television series in Television Productions. I&SS segment is likely to bear the brunt of decreasing unit sales of image sensors for mobile products.
Net income is now estimated to be ¥860 billion compared with the prior guidance of ¥840 billion. Operating income is projected to be ¥1,170 billion. Operating cash flow is expected to be ¥1,250 billion.
The Zacks Consensus Estimate for Badger Meter’s 2023 earnings has gained 6.3% in the past 60 days to $2.86 per share. BMI’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 6.7%. Shares of BMI have surged 63.7% in the past year.
The consensus mark for Salesforce’s fiscal 2024 earnings is pegged at $7.44 per share, up 0.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 19.3%.
CRM’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 15.5%. Shares of CRM have grown 12.2% in the past year.
The Zacks Consensus Estimate for Pegasystems’ 2023 earnings has gained 6.6% in the past 60 days to $1.46 per share. PEGA’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 166.2%. Shares of PEGA have surged 16.3% in the past year.
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SONY Beats on Q1 Earnings, Lifts Revenue Guidance
Sony Group Corporation (SONY - Free Report) reported first-quarter fiscal 2023 net income per share (on a GAAP basis) of ¥175.67 ($1.28) per share, decreasing from ¥209.66 reported in the year-ago quarter. The Zacks Consensus Estimate for earnings was pegged at 94 cents. Adjusted net income came in at ¥217.5 billion compared with ¥261.1 billion in the prior-year quarter.
Quarterly total revenues increased 33% year over year to ¥2,963.7 billion ($16.64 billion). The uptick was due to an increase in revenues in Game & Network Services (G&NS), Music, Imaging & Sensing Solutions and Financial Services business segments’ sales. The Zacks Consensus Estimate for revenues was pegged at $18.62 billion.
The company has adopted IFRS 17 “Insurance Contracts” (IFRS 17) from the first quarter of fiscal 2023. As a result, figures for first-quarter fiscal 2022 and fiscal 2022 are restated in accordance with IFRS 17.
Sony Corporation Price, Consensus and EPS Surprise
Sony Corporation price-consensus-eps-surprise-chart | Sony Corporation Quote
Segmental Results
In the quarter under review, G&NS sales were up 28% year over year to ¥771.9 billion. Sales in the segment increased owing to positive impacts of forex movement, higher sales of first-party titles and improving hardware sales. Operating income fell to ¥49.2 billion from ¥52.8 billion in the prior-year quarter mainly due to increasing costs (associated with acquisitions like Bungie).
Music sales increased 16% year over year to ¥358.2 billion in the fiscal first quarter on the back of higher recorded music and music publishing sales from paid-subscription streaming services. Operating income was ¥73.4 billion, up from ¥61 billion in the prior-year quarter.
Pictures sales declined 6% year over year to ¥320.4 billion mainly due to lower deliveries of the U.S. television series. Operating income was ¥16 billion compared with ¥50.7 billion a year ago. Operating income was affected by a decline in sales and higher marketing costs.
ET&S sales totaled ¥571.8 billion, up 4% year over year. The top-line performance was driven by higher sales of digital cameras and positive impacts of forex movement. Operating income was ¥55.6 billion compared with ¥53.6 billion in the year-ago quarter.
Imaging & Sensing Solutions sales rose 23% year over year to ¥292.7 billion. Operating income was ¥12.7 billion compared with ¥21.7 billion in the year-earlier quarter. Operating income was affected by higher manufacturing costs, depreciation and amortization expenses, and research and development expenditures.
Financial Services sales jumped 215% year over year to ¥681.4 billion. The uptick was driven by increases in revenues at Sony Life, and improvement in net gains and losses on investments in separate accounts. Operating income came in at ¥54.5 billion from ¥139.2 billion in the previous-year quarter.
All Other sales were up 1% to ¥19.5 billion in the fiscal first quarter. Operating income was ¥2.5 billion compared with ¥2.9 billion in the year-ago quarter.
Other Details
For the quarter under review, total costs and expenses were ¥2,715.3 billion, up 45.2% year over year. Operating income was ¥253 billion, down 30.6%.
Cash Flow & Liquidity
For the fiscal first quarter, Sony used ¥12.7 billion of cash from operating activities compared with ¥430 billion in the prior-year quarter.
As of Jun 30, 2023, the company had ¥1,532 billion in cash and cash equivalents with ¥1,807 billion of long-term debt.
Fiscal 2023 Outlook
Sony has revised its outlook for the fiscal year ending Mar 31, 2024. It now expects sales of ¥12,200 billion compared with the earlier guidance of ¥11,500 billion. The top-line performance is expected to be driven by strengthening momentum in GN&S, Music, and ET&S segment sales.
However, the company has lowered its revenue guidance for Pictures, and I&SS segments. Pictures’ revenues has been revised downward mainly due to negative impacts of strike conducted by WGA and SAG-AFTRA. This is expected to delay release dates for some theatrical releases in Motion Pictures and deliveries of television series in Television Productions. I&SS segment is likely to bear the brunt of decreasing unit sales of image sensors for mobile products.
Net income is now estimated to be ¥860 billion compared with the prior guidance of ¥840 billion. Operating income is projected to be ¥1,170 billion. Operating cash flow is expected to be ¥1,250 billion.
Sony currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks worth consideration in the broader technology space are Badger Meter (BMI - Free Report) , Salesforce (CRM - Free Report) and Pegasystems (PEGA - Free Report) . All stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Badger Meter’s 2023 earnings has gained 6.3% in the past 60 days to $2.86 per share. BMI’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 6.7%. Shares of BMI have surged 63.7% in the past year.
The consensus mark for Salesforce’s fiscal 2024 earnings is pegged at $7.44 per share, up 0.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 19.3%.
CRM’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 15.5%. Shares of CRM have grown 12.2% in the past year.
The Zacks Consensus Estimate for Pegasystems’ 2023 earnings has gained 6.6% in the past 60 days to $1.46 per share. PEGA’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 166.2%. Shares of PEGA have surged 16.3% in the past year.