HONG KONG, April 30 (Reuters) – Sony Group Corp (6758.T) shares dropped by as much as 4.8% on Monday after the Japanese electronics and entertainment giant’s annual profit projection disappointed investors.
Strong results from its music and microprocessor divisions helped the business generate a record operating profit for the fiscal year ending in March 2023.
However, it expects a slow recovery in profitability in the videogame unit, so it forecast a 3.2% decline in profits to 1.17 trillion yen ($8.55 billion) for the current fiscal year, missing the average analyst forecast of 1.275 trillion yen profit.
Atul Goyal, an analyst at Jefferies, recently said in a note to clients that Sony’s estimate “is overly conservative,” and that the company’s PlayStation 5 (PS5) game consoles and game software are likely to gain from pent-up demand.
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Sony’s President Hiroki Totoki said on Friday that the firm was ready to deliver PS5 consoles without keeping customers waiting, despite the fact that the company had failed to build enough PS5 to fulfill demand during the COVID-19 outbreak due to supply chain snarls.
In the year leading up to March of next year, the corporation expects to sell a record 25 million PS5 consoles.