Shares of entertainment company Sony (SONY) rallied on Wednesday following the release of its Fiscal Q4 2024 earnings report. The PlayStation 5 maker reported operating income of ¥203.6 billion, beating Wall Street’s estimate of ¥192.2 billion. Net income came in at ¥212.6 billion. Revenue in the latest earnings report was ¥2.63 trillion, a 24% drop year-over-year from ¥3.48 trillion.
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Sony’s earnings were hindered by its financial unit. However, it announced plans for a partial spinoff of this division via a stock dividend to SONY shareholders. This will see it distribute around 80% of the financial arm’s stock to investors.
SONY stock soared 4.85% in pre-market trading this morning, extending its 15.97% year-to-date rally.
Sony 2025 Guidance
Sony also provided investors with a guidance update for Fiscal 2025. It expects operating income of ¥1.28 trillion. While that would be an 8% increase year-over-year, it would come in below Wall Street’s estimate of ¥1.5 trillion. Here’s a quick look at its operating income history from MainStreetData.
The company pointed to a ¥100 billion potential impact from President Donald Trump’s tariffs on its operating income. However, it said this outlook doesn’t include the lower tariffs announced by the U.S. and China earlier this week.
The U.S. and China reached an agreement on Monday to temporarily reduce tariffs between the two companies. The U.S. dropped its tariffs to 30% from 145%, and China reduced its tariffs to 10% from 125%. These lower rates will last for 90 days as negotiations for a more permanent deal continue.
Is SONY Stock a Buy, Hold, or Sell?
Turning to Wall Street, the analysts’ consensus rating for Sony is Moderate Buy, based on two Buy and one Hold ratings over the last three months. With that comes an average SONY stock price target of $33, representing a potential 34.47% upside for the shares. These ratings and price targets will likely change as analysts update their coverage after today’s earnings.
