• Sony posted third-quarter operating profits of $3.42 billion Wednesday, double analysts' estimates.
  • It lifted expected operating profit for the year to March by roughly a third, to $8.95 billion.
  • But Sony warned that customers may have to wait longer for their PS5 consoles because of production delays.
  • Visit Business Insider for more stories.

Sony has raised its full-year profit outlook by one-third, helped by pandemic-fueled demand for games, movies, and electronics, but said it was struggling to build enough PlayStation 5 consoles amid a global shortage of semiconductors.

The Japanese electronics and entertainment conglomerate said on Wednesday that some customers may have to wait longer for their consoles as it competes for chips with other businesses, ranging from smartphone makers to car companies.

"It is difficult for us to increase production of the PS5 amid the shortage of semiconductors and other components," Hiroki Totoki, Sony's chief financial officer, said at a press briefing.

This comes amid the chaos already associated with the PS5 launch. After its release in November, the console quickly sold out on online retail sites in the US, Europe, and Japan, thanks to demand for video games from people stuck at home due to coronavirus lockdowns.

Reseller bots quickly snuck in, with one reseller group snagging nearly 3,500 consoles. And in the UK, some customers who ordered a PS5 for release day claimed Amazon shipped them random items instead, including a foot massager and pet food.

Despite the shortage of components and the problems associated with the PS5 launch, Sony still expects to sell more than 7.6 million PS5 consoles by end-March, Totoki said.

The shift to the new games console is also expected to encourage gamers to move to online downloads or subscription services, helping Sony boost the profitability of its gaming unit.

Sony's operating profit for the October-December quarter jumped 20% to 359.2 billion yen ($3.42 billion) from a year ago, double the 179 billion yen ($1.70 billion) estimate from six analysts surveyed by Refinitiv.

The company has now lifted its expected operating profit in the 12 months through March by roughly a third to 940 billion yen ($8.95 billion).

Alongside expecting continued demand for the PS5, Sony has also resumed some shipments of image sensors to customers in China from late November, Totoki said. Its revenues in this division were down 9.1% in the quarter.

The company had worried about the potential impact on its sensor business following US restrictions on sales of chips using US technology to Chinese smartphone maker Huawei.

In November, Huawei revealed plans to sell its budget-brand smartphone maker Honor. After the spin-off, Honor last month said it had signed deals with chip suppliers and component makers, including Sony.

Huawei was Sony's second-largest image sensor customer after Apple, accounting for about fifth of its $10 billion in sensor revenue, according to analysts.

Historically better known for hardware like the Walkman music player and TVs, Sony has invested heavily in recent years in beefing up its entertainment offerings while streamlining its consumer electronics business.

This year it plans to close a factory in Malaysia which manufactures home audio equipment, headphones, and other products.

The company has also delayed the release of four of its upcoming films - "Peter Rabbit 2: The Runaway," "Cinderella," "Ghostbusters: Afterlife," and "Uncharted" - as the COVID-19 pandemic continues to wreak havoc on the movie industry.

Read the original article on Business Insider

Receive a daily news update on your cellphone. Or get the best of our site emailed to you

Go to the Business Insider front page for more stories.