Sony Group Corporation Earnings Preview: What to Expect

• Sony is set to reveal its earnings report on Tuesday, May 14, 2024, with Wall Street expecting an EPS of $0.83 and revenue of $19.17 billion.
• Analyst revisions and positive Zacks Earnings ESP suggest Sony might surpass earnings expectations.
• Despite a forecasted revenue decline of 18.1% to $18.97 billion, Sony's Music and Pictures segments could bolster its financial performance.

Sony Group Corporation (NYSE:SONY) is on the brink of revealing its earnings report for the quarter on Tuesday, May 14, 2024, before the market opens. With Wall Street setting the bar with an earnings per share (EPS) estimate of $0.83 and a revenue forecast of $19.17 billion, the anticipation is high. Sony, a global conglomerate known for its diverse portfolio including electronics, gaming, entertainment, and financial services, faces a critical moment to demonstrate its financial health and strategic direction amidst a competitive landscape.

Recent analyst revisions and a positive Zacks Earnings ESP hint at a potentially strong earnings season for Sony. The Most Accurate Estimate for the current quarter has been adjusted to 85 cents per share, slightly above the Zacks Consensus Estimate of 83 cents per share, leading to a Zacks Earnings ESP of +2.00%. This suggests that Sony might surpass expectations in its upcoming earnings report, reflecting optimism based on the latest and most accurate information available.

Despite the positive earnings outlook, Sony's revenue is anticipated to decline by 18.1% to $18.97 billion compared to last year, according to Zacks Investment Research. This forecasted revenue dip contrasts with the expected 6.4% rise in earnings from the previous year, indicating a complex financial landscape for the company. The decline in revenue is partly attributed to lower hardware sales, especially in the PlayStation 5 (PS5) units, which are now expected to reach about 21 million units in fiscal 2023, down from the previously forecasted 25 million units.

However, not all is bleak for Sony. The company's Music and Picture segments are expected to bolster its top-line performance, providing a counterbalance to the challenges faced in hardware sales. This mixed outlook underscores Sony's diversified business model, which could help mitigate the impact of declining hardware sales on its overall financial performance.

In the past year, Sony's stock has seen a decrease of 16.1%, slightly lower than the sub-industry's decline of 15.5%. This performance reflects the broader challenges faced by the company, including the aforementioned decline in PS5 sales. Nonetheless, the anticipated support from the Music and Pictures segments, along with the potential for earnings to outperform expectations, presents a nuanced picture of Sony's financial health as it prepares to unveil its quarterly results.