After the Japanese electronics and entertainment conglomerate’s annual profit outlook fell short of market expectations, Sony Group Corp.’s (6758.T) shares dropped as much as 4.8% on Monday.
The business announced a record operating profit on Friday for the fiscal year that ended on March 31, 2023, thanks in large part to strong results at its music and microprocessor businesses.
However, it forecasted a 3.2% profit decline to 1.17 trillion yen ($8.55 billion) for the current fiscal year, missing the analysts’ average profit estimate of 1.275 trillion yen because it anticipates a slow recovery in the video game unit’s profitability.
In a letter to clients, Jefferies analyst Atul Goyal said that Sony’s outlook was “overly conservative” and that pent-up demand would likely benefit its PlayStation 5 (PS5) game systems and game software.
Due to supply chain bottlenecks, Sony had difficulty producing enough PS5 to fulfill demand during the COVID-19 pandemic, but President Hiroki Totoki announced on Friday that the company was now prepared to deliver the consoles without keeping customers waiting.
In the calendar year leading up to next March, the firm plans to sell a record 25 million PS5 units.