Sony plans to buy back 200 billion Japanese yen ($1.54 billion) of shares as the company announced its operating profit more than doubled thanks in large part to its PlayStation gaming division.
The Japanese giant plans to carry out the share repurchase between May 11, 2022, and May 10, 2023, it said, as it reported operating profit for the March quarter rose to 138.6 billion yen ($1.06 billion).
That was driven by continued strong sales of its PlayStation 5 console and games.
Operating profit at Sony’s games division rose 175% year-on-year in the March quarter. The company sold 11.5 million units of its flagship PlayStation 5 in the financial year ended Mar. 31 versus 7.8 million in the previous year.
Sony’s Chief Financial Officer Hiroki Totoki said the company is forecasting sales of 18 million units of the PlayStation 5 in the current financial year which ends in March 2023. That would be a 56% year-on-year rise.
That is in contrast to rival Nintendo which said on Tuesday that it is expecting a 9% decline in sales of its Switch console in the current business year due to issues procuring components for its devices.
Totoki did warn on a call with analysts however that lockdowns to deal with Covid-19 in China could constrain the company’s ability to procure parts.
Sony expects the gaming division’s operating income in the current business year to fall by around 12%. The company said that there will be increased costs for game development and it will record expenses if its proposed $3.6 billion acquisition of Destiny and Halo maker Bungie closes.
The Tokyo, Japan-headquartered company also found success with its movie division. “Spider-Man: No Way Home” helped Sony’s pictures business swing to a profit in the March quarter.
Totoki struck a note of caution on the state of the global economy.
“With the situation in Ukraine and Russia and slowdown of the global economy resulting from rapid inflation, we expect the demand environment this fiscal year to be even more severe than recent years,” the Sony CFO said.