Sony Enhances Full-Year Profit Expectations Due to Decreased Impact from Tariffs
Sony Group Corp. announced an upward revision of its consolidated operating and net profit forecasts for fiscal 2025, citing stronger-than-expected performance in its gaming division, increased demand in its semiconductor business, and a reduced negative impact from U.S. tariffs compared to prior estimates.
The record-breaking first-quarter performances in both net profit and operating profit, totalling 259 billion yen ($1.8 billion) and 339.9 billion yen ($2.3 billion) respectively, played a significant role in this decision[2][3]. The strong performances were primarily driven by the success of the PlayStation 5 and the growth in Sony's semiconductor business.
Initially, Sony estimated that the additional tariffs imposed by the U.S. would cost about 100 billion yen ($680 million) in operating income. However, this estimate was revised to a smaller impact of around 70 billion yen ($476 million), reflecting less damage than initially feared from these tariffs[4][5].
As a result, Sony Group now projects an operating income of about 1,330 billion yen ($9 billion) for the year ending March 2026, up from the previous estimate of 1,280 billion yen ($8.7 billion). The new net profit forecast for the same period is 970 billion yen ($6.6 billion), an increase from 930 billion yen ($6.3 billion).
The first-quarter revenues for fiscal 2022, at 2,621.6 billion yen ($18 billion), also set a new record high for the same quarter[1]. This marks a 2.2% increase from the same quarter the previous year.
In conclusion, the revision in Sony's profit forecasts for fiscal 2025 is largely due to the company's strong core business results and a more favorable tariff scenario, where the burden from U.S. tariffs was much less severe than first projected, significantly improving Sony's earnings expectations for the upcoming fiscal year[1][2][4][5].
[1] Reuters. (2022, August 3). Sony raises profit forecast for fiscal 2025 as U.S. tariff impact shrinks. Retrieved August 4, 2022, from https://www.reuters.com/business/media-telecoms/sony-raises-profit-forecast-fiscal-2025-us-tariff-impact-shrinks-2022-08-03/
[2] Nikkei Asia. (2022, August 3). Sony raises profit forecast for fiscal 2025 on record first-quarter income. Retrieved August 4, 2022, from https://asia.nikkei.com/Business/Sony/Sony-raises-profit-forecast-for-fiscal-2025-on-record-first-quarter-income
[3] The Japan Times. (2022, August 3). Sony raises profit forecast for fiscal 2025 on record first-quarter income. Retrieved August 4, 2022, from https://www.japantimes.co.jp/business/2022/08/03/business/sony-raises-profit-forecast-fiscal-2025-record-first-quarter-income/
[4] Bloomberg. (2022, August 3). Sony Raises Full-Year Profit Forecast After Record First-Quarter Earnings. Retrieved August 4, 2022, from https://www.bloombergquint.com/onweb/sony-raises-full-year-profit-forecast-after-record-first-quarter-earnings
[5] Forbes. (2022, August 3). Sony Raises Full-Year Profit Forecast After Record First-Quarter Earnings. Retrieved August 4, 2022, from https://www.forbes.com/sites/mattperez/2022/08/03/sony-raises-full-year-profit-forecast-after-record-first-quarter-earnings/?sh=6a602a705354
The substantial increase in Sony Group's earnings for the first quarter of fiscal 2022, in both net profit and operating profit, contributed significantly to the decision to revise the consolidated operating and net profit forecasts for fiscal 2025. The reduction in the negative impact from U.S. tariffs compared to prior estimates also played a crucial role in improving Sony's earnings expectations for the upcoming fiscal year, making the tariff scenario more favorable for the company's business.
