Sony elevates projection for annual profits, attributing reduced tariff impact
Sony Group Corp. Boosts Profit Forecasts for Fiscal 2025
Sony Group Corp. has announced an upward revision of its profit forecasts for the fiscal year ending March 2026. The new net profit forecast stands at 970 billion yen, up from the previous 930 billion yen. This increase is primarily due to a smaller-than-expected negative impact from U.S. tariffs and strong performances in its gaming, semiconductor, and network services businesses.
The company has reduced its estimate of the U.S. tariff impact on its operating profit to 70 billion yen from 100 billion yen. This revision partly reflects an improved estimate of the U.S. tariff impact, which has reduced the financial burden for Sony Group.
Beyond the reduced tariff burden, Sony's operating profit surged in the first quarter of FY 2025 by 36.5% year-on-year, reaching record highs. The surge was supported by rising revenues (+2.2%) driven mainly by the Game & Network Services (G&NS) and Imaging & Sensing Solutions (I&SS) segments. The net profit jumped 23.3%, boosted by strong demand in core areas such as gaming, semiconductor chips, sensors, and network services.
Additional factors contributing to the increased profit forecast include an increase in operating income from the G&NS segment, attributed to higher sales and subscriptions for online services. Higher financial income, particularly unrealized gains on securities, also played a role. Positive impacts from popular entertainment franchises like the "Demon Slayer" animation movie that performed well at the box office, supporting the Entertainment segment, were also significant. Despite some negative effects from unfavorable exchange rates, these were offset by gains from key business areas.
In summary, the improved profit outlook reflects a combination of lowered tariff costs, stronger performance in Sony's core gaming and semiconductor operations, and successful entertainment content, which together outweigh the negative factors.
The new operating profit forecast for the year ending March 2026 is 1,330 billion yen, up from the previous estimate of 1,280 billion yen. The sales forecast remains unchanged. Sony Group's first-quarter net profit for 2022 rose by 36.5% to 339.9 billion yen, setting a new record high. The company continues to anticipate a smaller negative impact from U.S. tariffs.
In light of the positive developments, Sony Group Corp. anticipates an increased profit from its photo business, with the unrealized gains on securities and popular entertainment franchises like "Demon Slayer" contributing to the success of the Entertainment segment. Additionally, the company is expected to make significant gains in finance through increasing operating income from the Game & Network Services (G&NS) segment, driven by higher sales and subscriptions for online services.
