In the final quarter of its fiscal year, which concluded on March 31, 2022, the Sony Group Corporation disclosed an uptick in both sales and net income. The company’s 2022 financial report indicated a nearly 10% surge in sales year-over-year, bolstered by robust performance in the film and electronics sectors.
The conglomerate’s profits rose substantially, with operating income elevating to $1.67 billion—a 17% increase from the prior fiscal period.
Sony Group anticipates heightened sales yet foresees a 6% reduction in profit margins for the fiscal year of 2022-23.
Insights from February’s Financial Performance & Forecasts
Come February 2022, bolstered by the unexpected success of Spider-Man: No Way Home, Sony revised its profit projections upward by 15%. The movie’s exceptional performance propelled operating profits in Sony’s motion picture segment up more than seven times to an estimated $1.30 billion. Amidst the ongoing pandemic situation at that time, Sony envisaged further prosperity for its cinematic division in the ensuing period.
Sony’s gaming realm also saw an uptick, with the PlayStation console’s sales surpassing the 3.5 million PS5 units mark in the third quarter. Nonetheless, projections for PS5 unit sales were downscaled from 14.8 million to 11.5 million for the year.
Financial Outcomes and Expectations for Q4
Sales figures for January through March 2022 showed a modest increase of 1%, reaching around $17.4 billion, while net income soared by an impressive 67%, hitting nearly $853 billion.
Despite the rise in sales, Sony’s net profits couldn’t keep pace. The fiscal year 2021-2022 witnessed a 10% rise in sales, amounting to roughly $76.3 billion, but net profits declined to $6.78 billion.
The corporation has projected a 15% increase in sales yet anticipates a 6% decline in net profits for the financial year 2022-23, expecting to clock in at about $6.38 billion.
The 2022 earnings from Sony’s film division, encompassing TV, movies, networks, and production, recorded profits close to $101 million against revenues of $2.69 billion. This influx of income spanned across theatrical releases, streaming, and licensing of older titles.
Sony anticipated an upsurge in year-on-year sales, especially in the realms of gaming and network services (G&NS) and image and sensing solutions (I&SS). The games and network services sector, which encompasses both hardware and software, remained profitable but only showed a marginal improvement over the last fiscal year. There was also a slight dip in PlayStation Plus memberships compared to the year before, with a March 2022 tally of 47.4 million compared to 47.6 million the previous year.
In terms of operating income, a year-on-year decrease is expected, attributed mainly to anticipated declines in both the film and G&NS sectors.
While pre-tax income is foreseen to remain relatively unchanged year-over-year, Sony forecasts financial advantages due to expected gains and avoidances of losses that were present in the previous forecast. The prior fiscal year included significant unrealized losses on securities, which will be counterbalanced by the expected reduction in operating income.
In Sony’s 2022 earnings declaration, they detailed that the decrease in net income for stockholders, when compared year-on-year, is primarily because of the non-recurrence of income tax expense reductions achieved from reversing deferred tax asset write-downs in the fiscal year ending March 31, 2022.
Analysts speculate that Sony may stand to benefit from the yen’s lowest value against the dollar in 20 years.
