Sony Corp rose to its highest since November last year after a resurgent games division helped the Japanese conglomerate blow past quarterly results expectations, vindicating chief executive officer Kazuo Hirai’s growing focus on media and entertainment.
Shares climbed 1.7 percent to ￥3,339, bringing its gains for the year to 11 percent, beating a broader market decline with the TOPIX dropping 15 percent in the same period.
Sony, which in years past has scaled back in businesses from telephones to televisions, posted a surprise profit for the quarter ending June. It more than doubled operating income from the sale of PlayStations (PS) and software, a particularly optimistic signal given the company’s next marquee products have not yet come to market.
Sony is looking to cement its lead over Microsoft Corp and Nintendo Co by launching a virtual-reality (VR) headset in October in the US, as well as a souped-up version of the PS4 potentially before the end of the year.
The twin gadgets mark Hirai’s long-term effort to dominate the industry with the PlayStation division, which he helped launch in 1994 before being tapped as CEO.
“Nothing short of fantastic, especially given that the market has been expecting a loss,” Amir Anvarzadeh, Singapore-based head of Japanese equity sales at BGC Partners Inc, wrote in an e-mail. “The big takeaway was the games business. Profit there more than doubled and that’s even before PlayStation VR launch in October, which will be a huge shot in the arm for hardware sales.”
Sony also said on Friday that it was expecting an uptick in demand for large-screen TVs beginning in 2018 as consumers replace older units, ahead of the 2020 Tokyo Olympics.
The company will seek to grab more domestic market share during the period, Sony executive vice president Ichiro Takagi said on Friday.
Sony reported net income of ￥21.2 billion (US$205 million) in the quarter through June, compared with the average analysts’ expectation for a ￥39 billion loss. The company maintained its forecast for annual profit of ￥80 billion.
The strength in games is helping investors look past the impact from the Kumamoto earthquakes, which shut the primary manufacturing site for image sensors that power digital cameras.
On Friday, Sony lowered its estimate for operating losses from the earthquakes to ￥80 billion for this fiscal year, from ￥115 billion, as recovery efforts wrapped up a month earlier than expected.
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