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Sony Group Corporation (SONY - Free Report) reported third-quarter fiscal 2023 net income per share (on a GAAP basis) of ¥294.82, which increased from ¥259.62 a year ago. Adjusted net income came in at ¥363.9 billion compared with ¥321.5 billion in the prior-year quarter.
Quarterly total revenues increased 22% year over year to ¥3,747.5 billion. The uptick was driven by an increase in revenues in the Game & Network Services (G&NS), Music, Pictures and Imaging & Sensing Solutions (I&SS) segments’ sales.
The company has adopted IFRS 17 “Insurance Contracts” from the first quarter of fiscal 2023. As a result, figures for second-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 16% year over year to ¥1444.4 billion. Segmental sales increased on the back of positive impacts of the forex movement and higher sales of non-first-party titles. Operating income fell to ¥86.1 billion from ¥116.2 billion in the prior-year quarter. The downtick was mainly due to a decrease in sales of first-party titles and an increase in losses from hardware.
Music sales improved 16% year over year to ¥422.1 billion in the fiscal third quarter on the back of higher recorded music and music publishing sales from paid-subscription streaming services. Operating income was ¥76.1 billion, up from ¥63 billion in the prior-year quarter.
Pictures sales increased 10% year over year to ¥366.3 billion, mainly due to an increase in television, digital streaming licensing revenues and home entertainment sales. Operating income was ¥41.6 billion compared with ¥25.4 billion a year ago.
ET&S sales totaled ¥735.7 billion, down 2% year over year. The top-line performance was affected by lower sales of televisions due to a decrease in unit sales. Operating income was ¥77.2 billion compared with ¥81.1 billion in the year-ago quarter.
I&SS sales rose 21% year over year to ¥505.2 billion, owing to an increase in sales of image sensors for mobile products. Operating income was ¥99.7 billion compared with ¥84.9 billion in the year-ago quarter owing to favorable forex impact.
Financial Services sales were ¥311.7 billion compared with ¥24.4 billion a year ago. The uptick was caused by a significant revenue increase at Sony Life. Also, there is an improvement in net gains and losses on investments related to market fluctuations for the general and separate accounts. Operating income came in at ¥77.3 billion compared with ¥47.1 billion in the year-ago quarter.
All Other sales were down 4.7% to ¥23.9 billion in the fiscal third quarter. Operating income was ¥2.6 billion compared with ¥9.1 billion in the year-ago quarter.
Other Details
For the quarter under review, total costs and expenses were ¥3,287.5 billion, up 23.4% year over year. Operating income was ¥463.3 billion, up 10% year over year.
Cash Flow & Liquidity
For the nine months ended on Dec 31, 2023, Sony generated ¥618.5 billion of cash from operating activities compared with ¥189.7 billion in the prior-year period.
As of Dec 31, 2023, the company had ¥2,019.1 billion in cash and cash equivalents with ¥1,840.1 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 ¥12,300 billion compared with the earlier guidance of ¥12,400 billion. The top-line performance is likely to be driven by strengthening momentum in the GN&S, Music, and ET&S segments’ sales.
Sales are expected to be lower than the previous forecast mainly due to lower-than-expected sales in the G&NS segment owing to an expected decrease in sales of hardware resulting from lower unit sales.
Financial Services’ revenue forecast is revised upward due to an increase in net gains on investment in the separate accounts at Sony Life. Sales in the ET&S segment are expected to be lower than the previous forecast due to an expected decrease in sales of televisions, resulting from lower unit sales.
Net income is now estimated to be ¥920 billion compared with the prior prediction of ¥880 billion. Operating income is suggested to be ¥1,180 billion. Operating cash flow is envisioned to be ¥1,080 billion compared with ¥1,160 billion projected earlier.
The Zacks Consensus Estimate for Itron’s 2023 EPS has remained unchanged in the past 60 days to $2.88. ITRI’s long-term earnings growth rate is 23%.
Itron’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 289.3%. Shares of ITRI have gained 26% in the past year.
The Zacks Consensus Estimate for Woodward’s fiscal 2024 EPS has inched up 5.7% in the past 60 days to $5.20. WWD’s long-term earnings growth rate is 15.5%.
Woodward’s earnings beat the Zacks Consensus in each of the last four quarters, the average surprise being 27.2%. Shares of WWD have gained 31.3% in the past year.
The Zacks Consensus Estimate for Watts Water Technologies fiscal 2024 EPS has improved 0.4% in the past 60 days to $8.35. WTS’s long-term earnings growth rate is 7.8%.
WTS’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 13.5%. Shares of WTS have soared 11.9% in the past year.
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SONY's Q3 Earnings Increase Y/Y, Revenue Guidance Lowered
Sony Group Corporation (SONY - Free Report) reported third-quarter fiscal 2023 net income per share (on a GAAP basis) of ¥294.82, which increased from ¥259.62 a year ago. Adjusted net income came in at ¥363.9 billion compared with ¥321.5 billion in the prior-year quarter.
Quarterly total revenues increased 22% year over year to ¥3,747.5 billion. The uptick was driven by an increase in revenues in the Game & Network Services (G&NS), Music, Pictures and Imaging & Sensing Solutions (I&SS) segments’ sales.
The company has adopted IFRS 17 “Insurance Contracts” from the first quarter of fiscal 2023. As a result, figures for second-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 16% year over year to ¥1444.4 billion. Segmental sales increased on the back of positive impacts of the forex movement and higher sales of non-first-party titles. Operating income fell to ¥86.1 billion from ¥116.2 billion in the prior-year quarter. The downtick was mainly due to a decrease in sales of first-party titles and an increase in losses from hardware.
Music sales improved 16% year over year to ¥422.1 billion in the fiscal third quarter on the back of higher recorded music and music publishing sales from paid-subscription streaming services. Operating income was ¥76.1 billion, up from ¥63 billion in the prior-year quarter.
Pictures sales increased 10% year over year to ¥366.3 billion, mainly due to an increase in television, digital streaming licensing revenues and home entertainment sales. Operating income was ¥41.6 billion compared with ¥25.4 billion a year ago.
ET&S sales totaled ¥735.7 billion, down 2% year over year. The top-line performance was affected by lower sales of televisions due to a decrease in unit sales. Operating income was ¥77.2 billion compared with ¥81.1 billion in the year-ago quarter.
I&SS sales rose 21% year over year to ¥505.2 billion, owing to an increase in sales of image sensors for mobile products. Operating income was ¥99.7 billion compared with ¥84.9 billion in the year-ago quarter owing to favorable forex impact.
Financial Services sales were ¥311.7 billion compared with ¥24.4 billion a year ago. The uptick was caused by a significant revenue increase at Sony Life. Also, there is an improvement in net gains and losses on investments related to market fluctuations for the general and separate accounts. Operating income came in at ¥77.3 billion compared with ¥47.1 billion in the year-ago quarter.
All Other sales were down 4.7% to ¥23.9 billion in the fiscal third quarter. Operating income was ¥2.6 billion compared with ¥9.1 billion in the year-ago quarter.
Other Details
For the quarter under review, total costs and expenses were ¥3,287.5 billion, up 23.4% year over year. Operating income was ¥463.3 billion, up 10% year over year.
Cash Flow & Liquidity
For the nine months ended on Dec 31, 2023, Sony generated ¥618.5 billion of cash from operating activities compared with ¥189.7 billion in the prior-year period.
As of Dec 31, 2023, the company had ¥2,019.1 billion in cash and cash equivalents with ¥1,840.1 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 ¥12,300 billion compared with the earlier guidance of ¥12,400 billion. The top-line performance is likely to be driven by strengthening momentum in the GN&S, Music, and ET&S segments’ sales.
Sales are expected to be lower than the previous forecast mainly due to lower-than-expected sales in the G&NS segment owing to an expected decrease in sales of hardware resulting from lower unit sales.
Financial Services’ revenue forecast is revised upward due to an increase in net gains on investment in the separate accounts at Sony Life. Sales in the ET&S segment are expected to be lower than the previous forecast due to an expected decrease in sales of televisions, resulting from lower unit sales.
Net income is now estimated to be ¥920 billion compared with the prior prediction of ¥880 billion. Operating income is suggested to be ¥1,180 billion. Operating cash flow is envisioned to be ¥1,080 billion compared with ¥1,160 billion projected earlier.
Zacks Rank and Stocks to Consider
Sony currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks worth considering in the broader technology space are Itron (ITRI - Free Report) , Woodward (WWD - Free Report) and Watts Water Technologies (WTS - Free Report) . Itron sports a Zacks Rank #1 (Strong Buy), while Watts Water Technologies and Woodward 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 Itron’s 2023 EPS has remained unchanged in the past 60 days to $2.88. ITRI’s long-term earnings growth rate is 23%.
Itron’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 289.3%. Shares of ITRI have gained 26% in the past year.
The Zacks Consensus Estimate for Woodward’s fiscal 2024 EPS has inched up 5.7% in the past 60 days to $5.20. WWD’s long-term earnings growth rate is 15.5%.
Woodward’s earnings beat the Zacks Consensus in each of the last four quarters, the average surprise being 27.2%. Shares of WWD have gained 31.3% in the past year.
The Zacks Consensus Estimate for Watts Water Technologies fiscal 2024 EPS has improved 0.4% in the past 60 days to $8.35. WTS’s long-term earnings growth rate is 7.8%.
WTS’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 13.5%. Shares of WTS have soared 11.9% in the past year.