SONY Earnings: Buyback, Stock Split, and Gaming Reshuffle

Japanese entertainment giant Sony Group (NYSE:SONY) is undertaking a major reshuffle in its gaming unit. The company also announced a mega ¥250 billion share buyback and a five-for-one stock split, alongside its full-year results today.

Gaming Rejig

Sony is adopting a dual-CEO structure in its video games division. Under this change, Hideaki Nishino will oversee Sony’s platform group business, while Hermen Hulst will lead its Studio business group. This major reshuffle follows an 8% reduction in headcount at Sony earlier this year and is part of a broader transformation in the gaming industry. Companies such as Microsoft (NASDAQ:MSFT) and Take-Two (NASDAQ:TTWO) have also implemented headcount reductions and studio reorganizations in recent times.

SONY’s Mixed Financials

Amid this shifting industry narrative, Sony reported a total revenue of ¥13 trillion for Fiscal Year 2024, an improvement of nearly ¥2 trillion over the prior year. However, higher operating expenses resulted in the company’s EPS contracting to ¥785.7 from ¥809.8 a year ago.

Boost from Buyback and Stock Split

Despite this mixed performance, investor sentiment in Sony is buoyant today after it announced a share repurchase program, worth ¥250 billion and a five-for-one stock split. The stock split will be effective on October 1st. For Fiscal Year 2025, Sony expects its top line to contract by 5.5% to ¥12.3 trillion. However, adjusted EBITDA is expected to rise by nearly 6.2% to ¥1.93 trillion for the year.

Is SONY a Buy, Sell, or a Hold?

Today’s price gains come after a nearly 20% drop in Sony’s share price over the past year. Overall, the Street has a Strong Buy consensus rating on the stock, alongside an average SONY price target of $110.95. However, analysts’ views on the entertainment giant could see changes following today’s earnings report.

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