Sony posts 10% rise in net profit boosted by image sensors, games business

Sony on Wednesday reported a 10 per cent rise in operating profit in the April-June quarter, beating analyst estimates, boosted by its image sensors and games businesses.
 

Profit at the Japanese tech and entertainment conglomerate was 279 bn yen ($1.90 bn), compared with an average estimate of 275 bn yen from seven analysts polled by LSEG.
 

The impact from foreign exchange and higher sales helped profit at the image sensors business, a major supplier for smartphone makers, roughly triple to 36.6 bn yen.
 

A sprawling group encompassing music, movies, games and chips, Sony hiked its full-year profit forecast by 3 per cent to 1.3 trillion yen aided by foreign exchange rates.
 

Financial markets have been whipsawed in recent days following an interest rate hike by the Bank of Japan and weak labour data from the U.S. that stoked recession fears.
 

"We are extremely concerned about the sudden fluctuations in exchange rates and possibility of economic downturn, particularly in the United States," Sony President Hiroki Totoki told an earnings briefing.
 

The rise in the yen has left investors reassessing the outlook for Japanese multinationals, as the weak currency had provided a cushion for many heavyweight exporters.
 

Sony's assumed exchange rate for the year is approximately 145 yen to the dollar. On Wednesday, it was trading around 147, but it had been at 38-year lows near 162 at the start of July.
 

In the first quarter Sony sold 2.4 mn PlayStation 5 (PS5) units, fewer than a year earlier, but booked a larger profit from its games business.
 

The group said in May it expects to sell 18 mn PS5 units this fiscal year, compared to 20.8 mn a year earlier.

The games industry is grappling with rising costs and weak pricing power. Sony-owned developer Bungie announced last week it is cutting almost a fifth of its workforce.
 

Profit at Sony's music division grew 17 per cent to 85.9 bn yen but fell 29 per cent to 11.3 bn yen at its movies business.
 

Sony's shares closed flat ahead of earnings and are down 8 per cent year-to-date, giving the company a market capitalisation of just over $100 bn.

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