:max_bytes(150000):strip_icc()/GettyImages-2152281830-9aebfc60065340f48954a451524e85a1.jpg "Sony Posts Earnings Beat, Announces Stock Split, Buyback Plans")
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Key Takeaways
- Sony Group reported fourth-quarter revenue and earnings that beat expectations thanks to increased profitability from its gaming segment.
- The company announced plans to split its stock in October, with one share splitting into five on the Tokyo Stock Exchange, as well as its American depositary receipts (ADRs) traded on the New York Stock Exchange.
- The tech and entertainment conglomerate also said it plans to buy back up to 30 million shares of its own stock.
Japanese tech and entertainment giant Sony Group (SONY) reported earnings for the final quarter of fiscal 2023 Tuesday, and also announced details of a new stock buyback program as well as plans to split the company’s stock later this year.
Q4 Results Beat on Increased Gaming Unit Profitability
Sony reported total revenue of $3.48 trillion Japanese yen ($22.25 billion), above analyst estimates compiled by Visible Alpha of 2.9 trillion yen ($18.54 billion). It also was more profitable than expected, reporting Y189.0 billion in net income, or Y153.6 per share, compared with the estimated Y136.95 billion, or Y131.5 per share.
The profitability of Sony’s gaming division improved markedly this year, with operating income rising to Y106.0 billion in the fourth quarter from Y38.9 billion the same time last year.
For the full fiscal year, Sony said its full-year sales and profitability for the gaming division, its largest by revenue, were impacted positively by third-party game sales and foreign exchange rates, and negatively by lower first-party game sales and higher rates of promotions to boost PlayStation 5 sales, a factor Sony has cited in the past. Overall, operating income fell by 7% year-over-year to Y1.21 trillion in fiscal 2023.
Despite projecting gaming revenue to fall slightly in fiscal 2024 to Y4.2 trillion from the 2023 mark of Y4.27 trillion, operating income in the segment is projected to increase by about Y20 billion. Operating income overall is expected to rise by 5% to Y1.28 trillion in the fiscal year.
Stock Split and Buyback Plans
Sony made another pair of announcements Tuesday, unveiling plans to perform a stock split later this year, along with the details of a plan to buy back a maximum of 30 million shares, worth up to Y250 billion, over the next year.
On October 1, Sony’s shares on the Tokyo Stock Exchange will split, with stockholders receiving five shares for each one share of Sony they own at market close September 30. The split will also impact Sony’s American depositary receipts (ADRs) that are traded on the New York Stock Exchange (NYSE), with ADRs set to split into five for each previous ADR on October 8.
Sony’s ADRs were up 5.8% to $80.56 at 9:48 a.m. ET Tuesday. They are down about 15% this year.