SONY Gears Up to Report Q3 Earnings: Here's What to Expect
Sony Group Corporation SONY is scheduled to report third-quarter fiscal 2022 results on Feb 2.
The Zacks Consensus Estimate for earnings is pegged at $1.40 per share, indicating a decrease of 32.4% on a year-over-year basis. The Zacks Consensus Estimate for revenues is pegged at $25.02 billion, suggesting a decline of 6.2% from the prior-year quarter’s levels.
The company surpassed the Zacks Consensus Estimate in three of the last four quarters and missed once. It has a trailing four-quarter earnings surprise of 22%, on average. In the past year, shares of the company have lost 18.8% of their value compared with the sub-industry’s decline of 18.6%.
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Factors to Note
The Japan-based company is likely to have gained from momentum seen in the Music and Pictures segments.
The Music segment is likely to have benefited from a rise in sales of recorded music and increased revenues from paid subscription streaming. Higher revenues for Visual Media and Platforms are likely to have favored the top line.
Sony Corporation Price and EPS Surprise
Sony Corporation price-eps-surprise | Sony Corporation Quote
The Pictures segment is likely to have benefited from higher television licensing and home entertainment revenues. Increased revenues from anime streaming services, including acquisition of Crunchyroll are also likely to have acted as tailwinds.
Strengthening Game & Network Services is likely to have cushioned the top-line performance. The segment is benefitting from favorable forex movement amid decline in sales of non-first-party titles, including add-on content and weak sales of first-party titles. In the second quarter of fiscal 2022, the segment’s sales were up 11.7% year over year due to the positive impact of the forex movement.
Easing supply-chain issues as well as increase in hardware sales due to price revisions for PlayStation 5 are other tailwinds. Operating income for the segment is likely to have been affected by higher costs for game software development and higher expenses associated with the acquisition of Bungie.
Uncertainty prevailing over global macroeconomic conditions may have weighed on the to-be-reported quarter’s performance. Weakness in Financial Services segment continues to be a major concern.
Sales of televisions and smartphones are likely to have been affected by rising inflation, geopolitical turmoil in Europe and the economic slowdown in China. This may affect the Electronics Products & Solutions segment in the to-be-reported quarter. Sales of image sensors for mobile products are also likely to be affected by macro weakness which, in turn, are likely to weigh on the Imaging & Sensing Solutions segment’s revenues.
What Our Model Says
Our proven model does predict an earnings beat for Sony this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Sony has an Earnings ESP of +19.29% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Helmerich & Payne HP has an Earnings ESP of +8.68% and currently sports a Zacks Rank #1. HP is scheduled to report first-quarter fiscal 2023 earnings on Jan 31. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Helmerich & Payne’s to-be-reported quarter’s earnings and revenues are pegged at 81 cents per share and $689.3 million, respectively. The company surpassed earnings estimates in the preceding four quarters, delivering an average surprise of 124.2%. Shares of HP have gained 71.4% in the past year.
MSCI Inc MSCI has an Earnings ESP of +0.76% and currently has a Zacks Rank #2. The company is scheduled to report fourth-quarter 2022 earnings on Jan 31.
The Zacks Consensus Estimate for MSCI’s to-be-reported quarter’s earnings and revenues are pegged at $2.71 per share and $565.9 million, respectively. Shares of the company have declined 3% in the past year.
Super Micro Computer SMCI has an Earnings ESP of +6.78% and presently carries a Zacks Rank #2. The company is slated to release second quarter of fiscal 2023 numbers on Jan 31.
The Zacks Consensus Estimate for SMCI’s to-be-reported quarter’s earnings and revenues are pegged at $2.95 per share and $1.77 billion, respectively. Shares of the company have gained 83.4% in the past year.
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