Japan’s Sony Corp. on Tuesday posted a 17 percent growth in its second-quarter operating income as a range of hit video-game titles provided a boost in its gaming division and raised its earnings outlook for the second consecutive quarter.
Operating profit for the Tokyo-based entertainment and electronics group rose to ¥239.5 billion ($2.1 billion) for the July-September quarter, beating expectations of ¥205 billion and coming in higher than the ¥204.2 billion registered in the same period last year.
Revenue grew ¥2.2 trillion, also surpassing analysts’ average estimate of ¥2.1 trillion.
In the chip unit, however, operating income declined 3 percent from the prior year to ¥48 billion, on sales of ¥254 billion.
Sony stated that it now expects annual profit for the current fiscal year through March to come in at ¥870 billion ($7.72 billion), upgrading its earlier forecast of ¥670 billion.
That compares with a consensus of ¥796.4 billion from analysts, according to a financial data firm.
Revenue has been adjusted to ¥8.7 trillion, compared with the prior estimate of ¥8.6 trillion reported in July.
Shares of Sony added 0.7 percent to $51.36 in after-hours trading on Tuesday.
Sony’s PlayStation Business Delivers Strong Performance
Sony’s optimism came as it saw strong performance in the PlayStation business, where last month’s PS4 exclusive Spider-Man made a new sales record for a Sony-developed video game.
For the September quarter, operating income at the PlayStation division climbed 65 percent from last year to ¥91 billion, accounting for a third of all Sony’s profit. Sales in the segment gained 27 percent to ¥550 billion.
Sony had already hiked forecast for its gaming business in July due to its PS4 exclusive God of War, which sold a record 3.1 million copies in its first three days in April.
September’s Spider-Man then exceeded that with 3.3 million copies during an equal period of time, leading to a back-to-back outlook hikes.
Free-to-play game Fortnite also helped lift sales during the quarter as spending on in-game products – with revenue split with Sony – grew over the summer months. Launched in 2017, Fortnite became this year’s hottest title, which is especially popular with teenagers.
Senior Analyst Hideki Yasuda said Fortnite delivered explosive profits over the summer months and that will contribute to Sony’s top line in a significant way.
The company’s December quarter also appears to be optimistic. After becoming the best-reviewed game of the year, analysts are seeing record sales of Red Dead Redemption II, which was released last week. This month’s Call of Duty: Black Ops has set a new PlayStation record for first day digital sales.
With third-party releases in the December quarter also setting records, the gaming division is providing the much-needed stability during a year of uncertainty for smartphone demand, analyst Damian Thong stated.
Thong added that this 2018 will be the best year for the PlayStation for first party games and overall profitability of the platform.
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