雅虎香港財經 Sony Shares Jump After Profit Beats and Buyback Plans
(Bloomberg) -- Sony Group Corp.’s stock climbed its most in more than 18 months after it announced a share buyback and a stock split and net income beat estimates in the March quarter.
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The Japanese company’s net sales for the quarter also beat expectations. That outweighed an annual revenue forecast that missed estimates and signs of waning demand for PlayStation 5 hardware. Cautious comments from Sony’s president about a joint bid with Apollo Global Management Inc. for Paramount Global also helped ease fears about a hasty deal.
Shares in Sony rose as much as 12% in Tokyo Wednesday morning, rebounding to levels prior to reports of its interest in Paramount.
Sony has been beefing up its content lineup in recent months. Arrowhead’s PlayStation 5 and PC shooter game Helldivers 2 far outperformed expectations, selling more than 12 million copies in its first 12 weeks on sale, Sony said. That makes it one of the PlayStation’s fastest selling games.
That helped operating income in its game and network segment surge a better-than-expected 170% to a record high in the March quarter. Net income came to ¥189 billion ($1.2 billion), above the average analyst estimate of ¥153.2 billion. Sales reached ¥3.5 trillion.
New leadership at Sony Interactive Entertainment means a large potential upside, wrote Jefferies analyst Atul Goyal in a note to investors. The company’s guidance is conservative, he said.
The stock got a further boost from the company’s plans to buy back up to 2.46% of its shares for as much as ¥250 billion. The company is also conducting a five-for-one stock split, effective Oct. 1. The stock split in particular will make it easier for retail investors to buy the stock, said Toyo Securities analyst Hideki Yasuda.
For the full year, the company said it expects sales revenue to be ¥12.3 trillion in the year through March 2025, narrowly missing analyst expectations.
Sony is predicting a ¥67.7 billion decline in the video game business, reflecting an aging hardware lineup. The company’s executives have said that the console, released in 2020, is now on the downslope of hardware sales, setting the stage for a potential updated edition for the holiday period this year.
Sony sold 4.5 million PS5 consoles in the March quarter. Active users on its PlayStation Network declined to 118 million in the period. PlayStation 5 exclusives, such as Square Enix Holdings Co.’s Final Fantasy VII Rebirth, have not performed well in recent times, pushing publishers like Square Enix away from locking their content down on a single platform.
Sony has said it won’t release any titles from its biggest first-party franchises like God of War or Bloodborne in the year to March.
The business in the current year will be bolstered by Sony’s music and smartphone image sensors units, the company said, both of which benefit from the weaker yen. In music, much of Sony’s revenue comes from streaming of content catalogs including artists like Lil Nas X and Michael Jackson. Spotify Technology SA reported a 14% jump in paid subscribers for the past quarter, expanding the audience for that material.
Sony makes its image sensors in Japan and sells them overseas. Smartphone markets returned to growth in the March quarter, with the Chinese consumer helping drive a recovery. Mobile makers are again increasing investment in new hardware and components, after whittling down inventories of unsold devices.
Shares in Sony had been under pressure this month as mounting speculation about the terms of its potential $26 billion bid for Paramount Global has weighed on sentiment. Investors are wary about the costs involved in acquiring Paramount’s film and TV library and integrating the business into Sony’s wider entertainment empire.
President Hiroki Totoki did not confirm Sony’s interest in Paramount, though he said it would be natural for Sony to explore attractive M&A targets and the company would be willing to make a move at the right price. The yen’s weakness will not pose a major challenge to completing acquisition deals that the company considers worthwhile, he added.
CNBC’s David Faber said Sony has begun to rethink its joint bid with Apollo for Paramount Global and that it had yet to sign a nondisclosure agreement, easing fears about a hasty bid without financing.
The Paramount takeover is one of several deals Sony is considering, as the Japanese company seeks to expand its digital content collection. While a merger with India’s Zee Entertainment collapsed this year, Sony is bidding against private equity funds Blackstone and KKR for control of Japanese e-comics provider Infocom Corp. in a deal estimated to be worth around $1.3 billion.
Read more: Apollo, Sony Weigh Bid for Paramount in Challenge to Ellison
--With assistance from Yasutaka Tamura and Junko Hayashi.
(Updates with share reaction, analyst commentary.)
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