· Sony (NYSE:SONY) released its fiscal Q4 2024 earnings this week, showcasing varied outcomes across different divisions with a reserved forecast for the coming year due to escalating tariff worries.
・The Japanese tech and entertainment giant posted consolidated sales of ¥2.63 trillion (US$17.24 billion), marking a 24 per cent year-over-year decline
・In April, Sony raised PS5 prices by up to 25 per cent in select EMEA and Asia-Pacific markets, citing inflation and currency volatility
・Sony stock (NYSE:SONY) opened trading at US$24.64
Sony (NYSE:SONY) reported its fiscal Q4 2024 This week's results show varied performance across different business sectors with a guarded forecast for the coming year due to increasing worries about tariffs.
The major Japanese technology and entertainment company reported combined revenues of ¥2.63 trillion (US$17.24 billion), which represents a 24 percent decrease compared to the previous year and falls below analysts' average prediction of US$20.40 billion. Even though the revenue did not meet projections, Sony exceeded expectations regarding profitability, achieving earnings per share (EPS) of ¥32.63 (approximately 21 cents), surpassing forecasts of 12 cents.
Segment highlights
・ Game and network services: The revenue fell by 4.2% to reach ¥1.05 trillion, with operating income decreasing by 12.5% to stand at ¥92.7 billion. During this period, Sony managed to sell 2.8 million PlayStation 5 units, marking a decline from both the 4.5 million units sold in the same time last year and the 9.5 million units in the preceding quarter. Nonetheless, there was an increase of 9% in video game software sales which contributed significantly towards lifting the operating income by 43% compared to the prior year’s figures.
・ Music: The continued robust performance saw revenues increase by 9.5 percent to reach ¥470.7 billion, along with an uptick of 17.4 percent in operating income to stand at ¥83.6 billion.
・ Pictures: Revenue increased by 1.9 percent to reach ¥414.6 billion, with operating income jumping 74.3 percent to hit ¥53.5 billion, largely due to robust content performance.
・ Entertainment, technology and services: The revenue decreased by 9.1 percent to reach ¥484.1 billion. Meanwhile, operating losses expanded to ¥20.4 billion from ¥6.4 billion in the previous year.
・ Imaging and sensing solutions: The revenue increased by 2.6 percent to reach ¥409 billion, while the operating income remained steady at ¥34.5 billion.
・ Financial services: The division reported a revenue decline of ¥172.4 billion along with an operational deficit of ¥11.6 billion.
In total, the combined operating income decreased by 11.2 percent to reach ¥203.6 billion, whereas the net income increased by 8.7 percent to stand at ¥197.7 billion.
Outlook
Sony has introduced a fresh share repurchase initiative totaling up to 100 million shares valued at ¥250 billion. This plan will commence on May 15, 2025, and conclude on May 14, 2026. Additionally, the corporation intends to partially divest its Financial Services division in October 2025, with this segment being categorized under discontinued operations beginning in the first quarter of fiscal year 2025.
In the future, Sony anticipates fiscal year 2025 sales totaling ¥11.7 trillion ($81.82 billion), which is notably lower than analysts' expectations of ¥13.34 trillion. The company projects operating income to reach ¥1.38 trillion prior to tariffs and drop to ¥1.28 trillion once these costs are factored in.
Duties worries and manufacturing approach
Executives from Sony voiced their worries about how U.S. tariffs on products made in China might affect them, as these duties have been changing lately due to decisions from the Trump administration. The Chief Financial Officer, Lin Tao, mentioned that they must find an additional ¥100 billion to cover expenses related to the tariffs, suggesting this could lead to higher prices for equipment such as the PlayStation 5.
CEO Hiroki Totoki disclosed that Sony is contemplating producing PlayStation consoles in the United States as a way to reduce their vulnerability to tariffs. This step aligns with U.S. policy objectives but presents significant implementation challenges for them.
In April, Sony increased the price of PS5 consoles by as much as 25 percent in certain EMEA and Asia-Pacific regions, attributing the change to inflation and fluctuating exchange rates. Since its release, the company has managed to sell 77.8 million PS5 units, which follows a similar pattern to the one seen with the PS4. Earlier this month, Microsoft (NASDAQ:MSFT) raised prices On its Xbox Series consoles.
Even with robust financial performance in certain areas and actions beneficial for shareholders, Sony has adopted a careful outlook due to increasing uncertainties surrounding worldwide trade conditions and the demand for consumer electronics.
About Sony
Sony Corp. Is among the most extensive entertainment corporations globally, boasting a diverse array of business ventures including consumer electronics, music production, film distribution, telecommunications, video games, robotics, and financial services.
Sony’s stock (NYSE:SONY) started the day 1.15 percent down at $24.64 but has climbed 46.48 percent compared to where it was this time last year.
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