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SONY's Q2 Earnings & Revenues Rise Y/Y, Stock Soars on Outlook Revision
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Sony Group Corporation (SONY - Free Report) reported second-quarter fiscal 2024 net income per share (on a GAAP basis) of ¥55.74 (37 cents), up from ¥32.35 in the year-ago quarter. The Zacks Consensus Estimate was pegged at 27 cents. Adjusted net income came in at ¥338.5 billion compared with ¥200.1 billion in the prior-year quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Quarterly total revenues rose 3% year over year to ¥2,905.6 billion ($19.5 billion). This upside resulted from healthy growth across Game & Network Services (“G&NS”) and Imaging & Sensing Solutions (“I&SS”) segments, offset by a contraction in the Financial Services and Pictures segments sales. The Zacks Consensus Estimate was pegged at $20.3 billion.
Sony has updated its outlook for the fiscal year ending March 31, 2025. It now expects sales of ¥12,710 billion, up from the previous guidance of ¥12,610 billion. The top-line performance is likely to be driven by strengthening momentum in the G&NS segment. For this segment, revenues are now expected to be ¥4,490 billion compared with the earlier projection of ¥4,320 billion.
Shares of SONY are up 7.9% in the premarket today. In the past year, the stock has gained 4.2% compared with the industry’s growth of 3%.
Image Source: Zacks Investment Research
SONY's Segmental Results
In the quarter under review, G&NS sales were up 12% year over year to ¥1,071.5 billion. Segmental sales increased on the back of positive impacts of the forex movement, higher sales from network services, notably PlayStation Plus and rising sales of non-first-party titles including add-on content amid a fall in hardware sales. Operating income rose to ¥138.8 billion from ¥48.9 billion in the prior-year quarter, due to forex impact and improvement in hardware profitability.
Music sales improved 10% year over year to ¥448.2 billion in the fiscal second quarter on the back of higher revenues from streaming services in Recorded Music and Music Publishing. Higher revenues from live events, merchandising and licensing in Recorded Music also acted as a tailwind. Operating income was ¥90.4 billion, up from ¥81 billion in the prior-year quarter, due to favorable impact from the increase in Recorded Music and Music Publishing sales. However, higher selling, general and administrative expenses acted as a headwind.
Pictures sales declined 11% year over year to ¥355.8 billion, driven by lower series deliveries in Television Productions, partially due to production delays related to the strikes in Hollywood last year. However, higher sales for Crunchyroll owing to paid subscriber growth and the acquisition of Alamo Drafthouse Cinema acted as tailwinds. Operating income was ¥18.5 billion compared with ¥29.4 billion a year ago, due to lower sales.
ET&S sales totaled ¥619.8 billion, up 1% year over year, due to the positive impact of the forex movement. Operating income was ¥70.2 billion compared with ¥61 billion in the year-ago quarter.
Sony Corporation Price, Consensus and EPS Surprise
I&SS sales rose 32% year over year to ¥535.6 billion, owing to an increase in sales of image sensors for mobile products. Higher unit sales coupled with a favorable product mix and positive impact of the forex movement acted as other catalysts. Operating income was ¥92.4 billion compared with ¥46.4 billion in the year-ago quarter, owing to higher sales and favorable forex impact.
Financial Services sales were ¥(63.3) billion compared with ¥103.9 billion a year ago. This downtick was caused by a considerable revenue decrease at Sony Life. Also, there was a deterioration in net gains and losses on investments related to market fluctuations for both the general account and the separate accounts. Operating income came in at ¥65.7 billion compared with ¥15.7 billion in the year-ago quarter. The uptick was mainly due to a considerable increase in operating income at Sony Life.
All Other sales were down 1.2% to ¥23.9 billion in the fiscal second quarter. Operating loss was ¥6.5 billion against ¥2.1 billion of operating income in the year-ago quarter.
Other Details
For the quarter under review, total costs and expenses were ¥2,477.9 billion, down 4.7% year over year. Operating income was ¥455.1 billion, up 73%.
SONY’s Cash Flow & Liquidity
For the six months ended Sept.30, Sony used ¥115 billion of cash from operating activities compared with ¥616 billion in the comparable period in the previous fiscal year.
As of Sept. 30, 2024, the company had ¥1,728.7 million in cash and cash equivalents with ¥1,988.6 billion of long-term debt.
Fiscal 2024 Outlook
SONY tweaked guidance for I&SS and Pictures segments. For I&SS, revenues are now expected at ¥1,770 billion compared with the earlier forecast of ¥1,850 billion. For Pictures, revenues are now expected at ¥1,510 billion, compared with the earlier forecast of ¥1,520 billion
Net income is estimated to be ¥980 billion and operating income is expected to be ¥1,310 billion.
Performance of Other Companies in the Broader Space
GoPro (GPRO - Free Report) reported non-GAAP breakeven earnings per share for the third quarter of 2024, narrower than the Zacks Consensus Estimate of a loss of 4 cents. The company reported earnings per share of 6 cents in the year-ago quarter. GPRO generated revenues of $259 million, down 12% year over year due to lower camera unit sales. The metric was within the company’s guidance of $255 million (+/- $5 million). The top line beat the consensus mark by 1.6%. GoPro shipped 881,000 camera units in the reported quarter, down 5% year over year. Shares of GPRO are down 54.1% in the past year.
Badger Meter, Inc (BMI - Free Report) reported EPS of $1.08 for the third quarter of 2024, beating the Zacks Consensus Estimate by 5.9%. Quarterly net sales were $208.4 million, up 12% from $186.2 million in the year-ago quarter. This uptick resulted from continued strong yet normalizing demand for its tailorable water management solutions. Shares of BMI have gained 57.6% in the past year.
Iridium Communications (IRDM - Free Report) reported EPS of 21 cents for the third quarter of 2024, beating the Zacks Consensus Estimate by 5%. The company incurred a loss of a cent per share in the prior-year quarter. Quarterly revenues were $212.8 million, up 8% from the year-ago level, driven by strength across all three segments. The Zacks Consensus Estimate was pegged at $205.7 million. Shares of IRDM have lost 21.3% in the past year.
Note: ¥1 = $0.00671994 (period average from July 1, 2024, to Sept. 30, 2024).
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SONY's Q2 Earnings & Revenues Rise Y/Y, Stock Soars on Outlook Revision
Sony Group Corporation (SONY - Free Report) reported second-quarter fiscal 2024 net income per share (on a GAAP basis) of ¥55.74 (37 cents), up from ¥32.35 in the year-ago quarter. The Zacks Consensus Estimate was pegged at 27 cents. Adjusted net income came in at ¥338.5 billion compared with ¥200.1 billion in the prior-year quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Quarterly total revenues rose 3% year over year to ¥2,905.6 billion ($19.5 billion). This upside resulted from healthy growth across Game & Network Services (“G&NS”) and Imaging & Sensing Solutions (“I&SS”) segments, offset by a contraction in the Financial Services and Pictures segments sales. The Zacks Consensus Estimate was pegged at $20.3 billion.
Sony has updated its outlook for the fiscal year ending March 31, 2025. It now expects sales of ¥12,710 billion, up from the previous guidance of ¥12,610 billion. The top-line performance is likely to be driven by strengthening momentum in the G&NS segment. For this segment, revenues are now expected to be ¥4,490 billion compared with the earlier projection of ¥4,320 billion.
Shares of SONY are up 7.9% in the premarket today. In the past year, the stock has gained 4.2% compared with the industry’s growth of 3%.
Image Source: Zacks Investment Research
SONY's Segmental Results
In the quarter under review, G&NS sales were up 12% year over year to ¥1,071.5 billion. Segmental sales increased on the back of positive impacts of the forex movement, higher sales from network services, notably PlayStation Plus and rising sales of non-first-party titles including add-on content amid a fall in hardware sales. Operating income rose to ¥138.8 billion from ¥48.9 billion in the prior-year quarter, due to forex impact and improvement in hardware profitability.
Music sales improved 10% year over year to ¥448.2 billion in the fiscal second quarter on the back of higher revenues from streaming services in Recorded Music and Music Publishing. Higher revenues from live events, merchandising and licensing in Recorded Music also acted as a tailwind. Operating income was ¥90.4 billion, up from ¥81 billion in the prior-year quarter, due to favorable impact from the increase in Recorded Music and Music Publishing sales. However, higher selling, general and administrative expenses acted as a headwind.
Pictures sales declined 11% year over year to ¥355.8 billion, driven by lower series deliveries in Television Productions, partially due to production delays related to the strikes in Hollywood last year. However, higher sales for Crunchyroll owing to paid subscriber growth and the acquisition of Alamo Drafthouse Cinema acted as tailwinds. Operating income was ¥18.5 billion compared with ¥29.4 billion a year ago, due to lower sales.
ET&S sales totaled ¥619.8 billion, up 1% year over year, due to the positive impact of the forex movement. Operating income was ¥70.2 billion compared with ¥61 billion in the year-ago quarter.
Sony Corporation Price, Consensus and EPS Surprise
Sony Corporation price-consensus-eps-surprise-chart | Sony Corporation Quote
I&SS sales rose 32% year over year to ¥535.6 billion, owing to an increase in sales of image sensors for mobile products. Higher unit sales coupled with a favorable product mix and positive impact of the forex movement acted as other catalysts. Operating income was ¥92.4 billion compared with ¥46.4 billion in the year-ago quarter, owing to higher sales and favorable forex impact.
Financial Services sales were ¥(63.3) billion compared with ¥103.9 billion a year ago. This downtick was caused by a considerable revenue decrease at Sony Life. Also, there was a deterioration in net gains and losses on investments related to market fluctuations for both the general account and the separate accounts. Operating income came in at ¥65.7 billion compared with ¥15.7 billion in the year-ago quarter. The uptick was mainly due to a considerable increase in operating income at Sony Life.
All Other sales were down 1.2% to ¥23.9 billion in the fiscal second quarter. Operating loss was ¥6.5 billion against ¥2.1 billion of operating income in the year-ago quarter.
Other Details
For the quarter under review, total costs and expenses were ¥2,477.9 billion, down 4.7% year over year. Operating income was ¥455.1 billion, up 73%.
SONY’s Cash Flow & Liquidity
For the six months ended Sept.30, Sony used ¥115 billion of cash from operating activities compared with ¥616 billion in the comparable period in the previous fiscal year.
As of Sept. 30, 2024, the company had ¥1,728.7 million in cash and cash equivalents with ¥1,988.6 billion of long-term debt.
Fiscal 2024 Outlook
SONY tweaked guidance for I&SS and Pictures segments. For I&SS, revenues are now expected at ¥1,770 billion compared with the earlier forecast of ¥1,850 billion. For Pictures, revenues are now expected at ¥1,510 billion, compared with the earlier forecast of ¥1,520 billion
Net income is estimated to be ¥980 billion and operating income is expected to be ¥1,310 billion.
SONY’s Zacks Rank
Sony currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Companies in the Broader Space
GoPro (GPRO - Free Report) reported non-GAAP breakeven earnings per share for the third quarter of 2024, narrower than the Zacks Consensus Estimate of a loss of 4 cents. The company reported earnings per share of 6 cents in the year-ago quarter. GPRO generated revenues of $259 million, down 12% year over year due to lower camera unit sales. The metric was within the company’s guidance of $255 million (+/- $5 million). The top line beat the consensus mark by 1.6%. GoPro shipped 881,000 camera units in the reported quarter, down 5% year over year. Shares of GPRO are down 54.1% in the past year.
Badger Meter, Inc (BMI - Free Report) reported EPS of $1.08 for the third quarter of 2024, beating the Zacks Consensus Estimate by 5.9%. Quarterly net sales were $208.4 million, up 12% from $186.2 million in the year-ago quarter. This uptick resulted from continued strong yet normalizing demand for its tailorable water management solutions. Shares of BMI have gained 57.6% in the past year.
Iridium Communications (IRDM - Free Report) reported EPS of 21 cents for the third quarter of 2024, beating the Zacks Consensus Estimate by 5%. The company incurred a loss of a cent per share in the prior-year quarter. Quarterly revenues were $212.8 million, up 8% from the year-ago level, driven by strength across all three segments. The Zacks Consensus Estimate was pegged at $205.7 million. Shares of IRDM have lost 21.3% in the past year.
Note: ¥1 = $0.00671994 (period average from July 1, 2024, to Sept. 30, 2024).