Games and "Spider-Man 4" both drive growth, Sony (SONY.US) Q2 operating profit up 45%, beating expectations, raises full-year profit guidance

On November 5, before the U.S. market opened, Sony Group (SONY.US) reported its second-quarter results for fiscal 2026. Driven by strong performance in its games and pictures businesses, second-quarter operating profit rose 45% to JPY622.3 billion (approximately US$3.95 billion), beating market expectations. The earnings report showed that the company's Q2 revenue was JPY3,429.4 billion, up 10.3% year on year; net profit attributable to shareholders of the parent company was JPY449.6 billion, up 24.2% year on year. Excluding the profit from the financial business that was divested in the same period last year, profit from continuing operations rose 44.4% year on year. First-half revenue totaled JPY6,267.2 billion (+9.4%), operating profit was JPY1,098.8 billion (+42.9%), and diluted earnings per share were JPY134.30. By segment, Game & Network Services was the largest profit engine, with operating profit of JPY220.1 billion in the quarter, surging 82.9% year on year; the pictures business posted operating profit of JPY92.6 billion, more than five times the JPY13.9 billion in the same period last year, with revenue up 48.4% year on year, and the blockbuster film "Spider-Man: Brand New Day" was a major contributor to the pictures performance. The music business posted operating profit of JPY122.8 billion, up 6.4%; Imaging & Sensing Solutions posted operating profit of JPY154.6 billion, up 11.8%, but revenue fell 5.1% year on year due to the impact of the image sensor market. The company also raised its full-year guidance for fiscal 2026: revenue is expected to be JPY13 trillion (+4.2%), operating profit JPY1.87 trillion (+29.2%), and net profit attributable to shareholders of the parent company JPY1.33 trillion (+29.0%), with the full-year profit outlook raised by about 9% from before. On dividends, the first-half interim dividend was JPY17.50 per share, and the full-year forecast is JPY35.00 per share, up 40% year on year. Looking ahead, Sony's games business is expected to be a major beneficiary of "GTA 6," which will be released on November 19, but the company also faces pressure from rising memory chip prices driven by the AI boom, a cost pressure that is troubling the entire consumer electronics industry, and Apple Inc. (AAPL.US) also warned this week of margin pressure in the holiday season.