Sony Warns: Tariffs Will Wipe Out This Year’s Profit Growth

​Sony is the latest corporate heavyweight to wave a red flag over tariffs. On Wednesday, the Japanese tech giant warned that this year’s operating profit will flatline, with U.S. tariffs taking a hefty 100 billion yen ($680 million) bite out of its bottom line.

Sony had initially projected 8% growth in operating income, but once the tariff math was added, that figure dropped to zero. Its full-year forecast of 1.28 trillion yen in operating income also came in below the 1.38 trillion yen analysts expected, according to Visible Alpha.

Still, investors seemed unfazed. Sony shares jumped 5% in premarket trading, and the stock is already up 16% this year. The company is banking on a few bright spots: more revenue from its game titles, music streaming, and its booming anime business. Even with fewer PS5 units sold, software and digital content are carrying the weight. Sony also expects stronger sales from image sensors for mobile phones and a better product mix in its digital camera segment.

Meanwhile, it’s dealing with lingering effects from the Hollywood strikes of 2023, which are weighing on theatrical revenue. But the company’s bottom line still grew 9% in the recent quarter, with profit hitting 197.7 billion yen even as overall sales slumped 24%.

Sony also announced a major corporate shake-up: it’s spinning off more than 80% of its financial services arm, with plans to list it on the Tokyo Stock Exchange by September. U.S. holders of Sony ADRs will receive unsponsored ADRs for the spun-off unit, meaning they’ll trade over-the-counter rather than on the NYSE.

To top it off, Sony unveiled a 250 billion yen stock buyback—another likely reason why investors shrugged off the weak profit outlook.

Bottom line: Tariffs are squeezing Sony’s earnings, but a strong pipeline of digital revenue and a shareholder-friendly playbook are helping to soften the blow. For now, the market’s giving the company a pass.







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