Sony Group has lifted its full-year earnings forecast after first-quarter net profit growth surpassed expectations, driven by higher profits in its music and image sensor divisions, even as its gaming business remained sluggish.
In its earnings report, Sony stated that operating profit in its music segment rose 14%, supported by increased revenue from streaming services and live events. Operating profit in the image sensor business more than doubled, fueled by growth in smartphone product sales. While gaming revenue was largely flat, the segment's earnings were bolstered by US tariff refunds and favorable foreign exchange effects.
Sony Chief Financial Officer Lin Tao expressed confidence that user engagement in gaming would improve in the coming months, with major titles like "Marvel's Wolverine" and "God of War: Ragnarök" scheduled for release. Over recent years, Sony has spent billions of dollars on acquisitions to strengthen its entertainment content, while simultaneously divesting from other areas. In May, Sony agreed to acquire the entire catalog of Recognition Music Group, which includes over 45,000 popular songs from artists ranging from Rihanna to Fleetwood Mac. In October, Sony spun off its financial services business. The company also announced it has proposed acquiring Japanese camera lens manufacturer Tamron.
Net profit jumped 32% year-on-year to 342.16 billion yen (approximately $2.15 billion), surpassing the analyst consensus estimate of 262.6 billion yen. Revenue grew 8.2% to 2.838 trillion yen. Sony now projects revenue for the fiscal year ending March 2027 to rise 0.2% to 12.500 trillion yen, with net profit increasing 17% to 1.210 trillion yen, both figures above its previous guidance.
Despite the solid earnings, Sony's stock price remains under pressure due to investor concerns that consumers are spending more time on AI tools rather than traditional entertainment. Worries over rising costs of memory chips for gaming consoles have also weighed on the stock. Following the earnings release, Sony's shares closed down 0.6%, bringing the year-to-date decline to 5.9%.
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