TOKYO — Sony Group expects operating profit for the year ending March 2022 to dip 4% to 930 billion yen ($8.5 billion), the Japanese conglomerate said on Wednesday.
The company expects its breadwinner gaming business to fall short of the previous year, which saw unprecedented demand during the initial phases of the coronavirus pandemic. While Sony anticipates that sales of its next-generation gaming console PlayStation 5 to contribute to revenue, a decline in software sales will hurt profit.
An increase in research and development costs related to its image sensor business will also put downward pressure on the company.
While Sony expects revenue to rise 7% to 9.7 trillion yen, annual net profit is forecast to decline 43% to 660 billion yen compared with the previous year, which saw a big increase due to tax benefits.
Sony’s outlook fell short of analysts’ expectations. As of Monday, a Quick consensus survey forecast 965 billion yen in operating profit.
For the year through March 2021, Sony posted a 101% jump in net profit to 1.1 trillion yen ($10.1 billion) — the highest-ever for the company — while revenue rose 9% to 8.9 trillion yen. Operating profit increased 15% to 971 billion yen.
The Japanese electronics-to-entertainment giant is using IFRS accounting standards from this fiscal year, which started on April 1. Hence, year-on-year comparisons may not be exact.
The company also announced on Wednesday a stock buyback of up to 200 billion yen. In a statement, Sony said the buyback will enable the company to “flexibly repurchase its own shares in consideration of factors such as opportunities for strategic investment, Sony’s financial condition and the price of its common stock as part of improving capital efficiency and implementing capital policy according to the business environment.”
