Sony (SONY.US) Q4 has mixed results and announced a 250 billion yen stock repurchase plan warning that tariffs will cause 100 billion yen profit loss

The Zhitong Finance App learned that on May 14, Sony (SONY.US) announced the results for the fourth quarter and full year of the 2024 fiscal year ending March 31, 2025. According to financial reports, Sony's Q4 sales were 2.6 trillion yen, down 24% year on year, falling short of market expectations of 3.03 trillion yen; operating profit was 203.6 billion yen, down 11% year on year, better than market expectations; net profit attributable to the company's shareholders was 1977 billion yen, up 5% year on year, better than market expectations of 145 billion yen.

By business, Sony's gaming and network services business (G&NS) sales were 1.05 trillion yen, music division sales were 470.7 billion yen, film and television division sales were 414.6 billion yen, entertainment, technology and services business (ET&S) sales were 484.1 billion yen, and imaging and sensing solutions business (I&SS) sales were 409 billion yen.

Sony's full-year sales for fiscal year 2024 were 12.96 trillion yen, roughly the same as the previous fiscal year; operating profit was 1.41 trillion yen, up 16% year on year; and net profit attributable to the company's shareholders was 1.14 trillion yen, up 18% year on year. It is worth mentioning that Sony sold a total of 18.5 million PlayStation 5 consoles in fiscal year 2024, down from 20.8 million units in the previous fiscal year.

Sony's new CEO Hiroki Totoki's top priority is to lead the company to withstand the impact of US tariff policies, including the impact on the company's image sensors and film and television division. For Sony's PlayStation 5 console, most of the console's sales come from the US, and the console is mainly produced in China. Sony raised the console's price in Europe, Australia, and New Zealand last month, which raises doubts that if the Trump administration's tariffs become the norm, the console may rise in price in the US. The price increase will slow down the development momentum of this 5-year-old console, especially as it competes with competitor Nintendo's Switch 2, which will be launched in June.

Furthermore, the much-anticipated delay in the launch of “GTA 6” also affected the PlayStation 5 console. David Cole, CEO of DFC Intelligence, an American digital entertainment research company, said, “The delay in “GTA 6” is a real blow to PlayStation 5 console sales. This game is supposed to make many consumers switch from PlayStation 4 to PlayStation 5.”

Looking ahead to fiscal year 2025, Sony expects annual operating profit of 1.28 trillion yen, and tariffs will have a negative impact of 100 billion yen on full-year operating profit. Even after excluding the impact of tariffs, Sony's operating profit expectations for fiscal year 2025 fell short of market expectations of 1.5 trillion yen.

At the same time, Sony announced a stock repurchase plan of up to 250 billion yen and announced a schedule for a partial divestment of Sony's financial division. Sony said it plans to list the financial division on September 29 and will treat it as a discontinued business in accounting starting the current fiscal quarter.