Sony Group Corporation SONY is scheduled to report second-quarter fiscal 2024 earnings on Nov. 8.

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The Zacks Consensus Estimate for earnings is pegged at 27 cents per share, indicating a rise of 22.7% from the year-ago reported figure. The consensus estimate for revenues is pegged at $20.3 billion, suggesting growth of 7.7% from the prior-year actuals.

The company’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters while missing in one, with the average surprise being 12.1%.

In the past year, the stock has gained 4.1% compared with the  sub-industry’s rise of 1%.

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Factors to Consider

Robust performance across the Game & Network Services (G&NS), Entertainment, Technology & Services, Imaging & Sensing Solutions, Music and Pictures segments is likely to have aided Sony’s top-line performance. 

The G&NS division is likely to have gained from higher sales from network services, notably PlayStation Plus and rising sales of non-first-party software titles. Healthy growth in the network services sale due to more customers choosing premium services and an increase in average revenue per user resulting from price adjustments in PlayStation Plus, bodes well for Sony.

Declining hardware sales owing to fewer units sold is likely to have acted as a headwind. In the quarter, Sony announced a 19% price hike for its PS5 console in Japan. Beginning Sept. 2, 2024, the PS5 costs ￥79,980 for the standard edition and ￥72,980 for the digital edition.

Sony Corporation Price and EPS Surprise

Sony Corporation price-eps-surprise | Sony Corporation Quote

Sony’s Music division benefits from the ongoing rise of recorded music and music publishing sales from paid subscription streaming services. The company is pursuing strategic expansion in evolving markets with a strong foothold in Latin America, India, Africa and other global markets.

The Pictures segment is gaining from higher Crunchyroll sales owing to paid subscriber growth amid a decline in theatrical releases and series deliveries in Television Productions. It plans to expand this business by maximizing the value of the IP assets and capitalizing on the opportunity presented by the growing anime market. Sony has inked a global distribution agreement with Amazon Prime Channels, aiming to capitalize on the rapidly evolving Anime market.

However, a downtrend in the Financial Services business is likely to have weighed on Sony’s performance in the to-be-reported quarter. Management remains wary of foreign exchange headwinds and the potential for an economic slowdown, particularly within the United States.