Sony shares jump 9% after profit forecast hike
Technology
The yen has weakened sharply against the dollar
TOKYO (Reuters) - Shares in Sony Group Corp (6758.T) leapt 9% on Wednesday morning after the entertainment conglomerate hiked its full-year profit forecast in contrast to lacklustre projections by many peers.
Sony reported that it produced more than 6.5 million PlayStation 5 (PS5) units during the second quarter ahead of the year-end shopping season, signalling that supply chain snarls that have hampered the games business are easing.
The value of inventory at Sony’s games unit surged to 412.5 billion yen ($2.79 billion) in the second quarter, versus 146.2 billion yen three months earlier.
Sony aims to sell more than 18 million PS5 units this year, Chief Financial Officer Hiroki Totoki has said.
"PS5 production constraints have eased, and we believe (the) game segment’s operating leverage is likely to drive upside from next (quarter)," Jefferies analyst Atul Goyal wrote in a note.
Sony’s profit forecast revision was aided by a boost from exchange rate changes at units including the music business, which recorded higher sales to streaming services supported by artists such as Beyonce, whose new album was released in July.
The Japanese conglomerate also hiked the outlook for its movies and image sensor businesses citing the FX boost but noted lower sensor sales.
The yen has weakened sharply against the dollar as interest rates in the United States and Japan diverge. A weaker Japanese currency typically boosts profits earned by local companies overseas when repatriated.
