Sony raises earnings forecast after record first-quarter profit

TOKYO, Aug 4 - Sony Corp raised its earnings outlook on Wednesday following a record first-quarter operating profit helped by pandemic stay at home demand for PlayStation 5 consoles, TVs, music and movies. Operating profit for the quarter ended June 30 rose to 280.1 billion yen from 221.7 billion yen a year earlier, topping the 207.96 billion estimated by 10 analysts, Refinitiv Eikon data showed. It raised its profit forecast for the year through March 2022 to 980 billion yen from 930 billion, raising it closer to the 1 billion Yen average estimate from 25 analysts. Sony expected continuing pandemic demand for its devices and content to wane as covington virus lockdowns eased, but when fresh waves of COVID infections sweeping the world, restrictions are still common. A shortage of semiconductors, however, which is also affecting the likes of Apple, means it cannot produce enough PlayStation game consoles to meet demand. That supply chain constraint could also impact the production of other electronic devices, Chief Financial Officer Hiroki Totoki told a news briefing after Sony's results. We use a lot of semiconductors and it is a source of concern, Totoki said. We can't become complacent, he added. In May, Sony said it expected to sell 14.8 million PS 5 units this fiscal year. Launched in core markets in November 2020, the console sells for as much as $500 and quickly sold out. Totoki has scored enough chips to reach this production target, Sony said. As Sony simplifies its consumer electronics business, Sony beefs up its entertainment content and distribution business. Sony also increasing the offerings in streaming services of Walt Disney Co and Netflix that were previously offered by HBO. High production costs, however, dented profitability, the company said. In its trading division in May, Sony effected a 16.8 billion one-time loss from an unauthorised funding transfer at a Bermshire subsidiary SA Reinsurance in May. The company said it reported the payment to local authorities and was trying to recover the money.