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Sony tops expectations and upgrades outlook

Sony posted stronger-than-expected earnings for the December quarter, powered by favorable foreign exchange movements and solid performances in its music and imaging businesses, prompting the Japanese technology and entertainment group to lift its full-year guidance.

The company reported quarterly revenue of 3.71 trillion yen (about $23.7 billion), narrowly beating analyst expectations of 3.69 trillion yen. Operating profit came in at 515 billion yen, well above forecasts of roughly 469 billion yen.

That marked a 22% increase in operating profit compared with the same period a year earlier, reversing the year-on-year decline seen in the previous quarter. Revenue edged up 1% annually, reflecting steady demand across several divisions despite softness in gaming hardware.

Following the results, Sony raised its full-year operating profit outlook to 1.54 trillion yen, an upgrade of 110 billion yen, or about 8%, from its prior forecast. The company also lifted its annual revenue projection by 300 billion yen to 12.3 trillion yen, representing roughly 3% growth.

Sony maintained its estimate of a 50 billion yen impact from U.S. tariffs.

Shares initially jumped more than 5% after the earnings release before giving back gains, trading about 0.9% lower by early afternoon in Tokyo.

PlayStation revenue dips as console sales slow

Sony’s Game & Network Services division, home to the PlayStation brand and the company’s largest revenue contributor, reported quarterly sales of 1.613 trillion yen, down 68.7 billion yen from a year earlier.

The gaming segment continues to benefit from higher-margin digital game downloads and growing subscriptions to PlayStation Plus. However, those gains were offset by slower hardware shipments, as demand for consoles moderated after the post-pandemic surge.

Executives signaled that the hardware side of the business is likely to face additional pressure this year due to rising component costs.

PlayStation consoles depend heavily on dynamic random access memory (DRAM) chips, and the global supply of memory remains tight as artificial intelligence servers and data centers absorb an increasing share of production.

According to market research firm TrendForce, contract prices for conventional DRAM are expected to jump between 90% and 95% in the current quarter compared with the previous three months. Industry leaders have also warned that the broader memory shortage could extend through 2027, raising concerns about margin compression for consumer electronics makers.

Sony acknowledged that higher memory prices could weigh on profitability in its gaming hardware business in coming quarters, even as it continues to push software and services to stabilize earnings.

Music and imaging businesses provide key support

Helping offset gaming-related headwinds were robust performances from Sony’s music and imaging segments.

Revenue in the music division climbed 12.6% year on year in the December quarter, driven by stronger streaming income, growth in live events, and higher merchandising sales. Sony Music has benefited from a diversified artist portfolio and continued expansion of its global streaming footprint, which has become an increasingly important profit engine for the group.

Meanwhile, Sony’s Imaging & Sensing Solutions business delivered more than 20% revenue growth. The unit, which designs and manufactures advanced image sensors used in smartphones, automotive systems, and industrial applications, continues to gain from demand for higher-end camera components and machine-vision technologies.

Sony remains the world’s leading supplier of image sensors, with its components embedded in devices produced by major smartphone makers and automotive manufacturers. Analysts view this business as a long-term growth pillar, especially as cameras become more central to autonomous driving systems and AI-enabled devices.

Currency tailwinds boost bottom line

Foreign exchange movements also played a meaningful role in Sony’s quarterly performance. The weaker yen inflated overseas earnings when translated back into Japanese currency, providing a lift to operating profit.

With a large portion of Sony’s revenue generated outside Japan, particularly in the United States and Europe, currency dynamics continue to be a significant swing factor for results.

Management reiterated that while exchange rates provided support in the December quarter, cost inflation in components and logistics remains an ongoing challenge.

Looking ahead

By raising its full-year outlook, Sony signaled confidence in its diversified business model, even as individual segments face distinct pressures. The company is leaning on strength in music and imaging to balance softer console sales and rising semiconductor costs.

Investors will be watching closely to see how Sony navigates higher DRAM prices, the pace of PlayStation hardware demand, and ongoing geopolitical risks tied to trade and tariffs. At the same time, continued growth in subscriptions, digital content, and sensor technology offers potential upside as the company moves toward the next fiscal year.

For now, Sony’s December-quarter results highlight the resilience of its portfolio, showing how entertainment, imaging, and currency tailwinds can help cushion cyclical swings in consumer electronics.

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