Sony beat market expectations this Thursday, reporting a healthy jump in operating profit for the December quarter. The company earned 515 billion yen ($3.28 billion), which is a 22% increase from last year. While revenue only grew by a tiny 1%, the company got a big boost from favorable exchange rates that helped offset rising costs.
The tech giant feels confident about the rest of the year. It raised its full-year profit forecast by 8% to 1.54 trillion yen and bumped its revenue target to 12.3 trillion yen. Management also plans to keep shareholders happy by expanding its share buyback program to 150 billion yen through 2026.
However, it wasn’t all good news. The gaming division, which usually carries the company, saw revenue drop slightly. While fans are spending more on digital games and PlayStation Plus subscriptions, console sales are slowing down. Sony is also worried about the rising price of memory chips. Because AI companies and data centers are buying so much memory, the cost of DRAM chips for consoles is skyrocketing. Some experts think these prices could nearly double this quarter. Sony executives say they will fight these costs by selling more software and services to people who already own a PlayStation.
Thankfully, Sony’s other businesses picked up the slack. The music department grew by 12.6% because more people are streaming music and going to live shows. The imaging and sensor division did even better, growing by more than 20%. This part of the company makes the sensors found in smartphone cameras. Sony believes its focus on high-end phones will protect it from a general slowdown in the mobile market.
Investors didn’t seem entirely convinced, though. Sony’s stock price jumped right after the news but eventually gave back those gains, ending the day flat. Even with the profit beat, the market seems worried about how the company will handle expensive computer parts and a shifting gaming market in the coming months.
