Please ensure Javascript is enabled for purposes of website accessibility

Why Sony Corp. Shares Jumped 16.5% Higher Today

By Anders Bylund - Oct 31, 2017 at 12:53PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The entertainment giant's second-quarter results blew away Wall Street's expectations.

What happened

Shares of Sony (SONY -0.32%) jumped as much as 16.5% higher in Tuesday's trading, peaking at 11:25 a.m. EDT. The consumer electronics and media conglomerate reported second-quarter results in the early morning, smashing analyst expectations and driving Sony's share prices up to levels not seen since 2008.

So what

Sony's second-quarter sales rose 22% year over year, landing at $18.3 billion. On the bottom line, unadjusted earnings rose from roughly breakeven to $0.90 per diluted share. Wall Street analysts would have settled for earnings of $0.54 per share on sales near $17.6 billion. Looking ahead, Sony raised its full-year revenue guidance by 2.4% while profit targets were boosted by approximately 30%.

Spider-man lounging in a web, high above a misty cityscape showing Marvel's version of New York City.

Image source: Columbia Pictures.

Now what

Apart from an expected decline in smartphone sales, Sony fired on all cylinders in the second quarter. High demand for PlayStation 4 games drove a 35% year-over-year sales increase in the gaming segment, home entertainment revenue rose 28% as consumers embraced Sony's high-end TV sets, and the movie studios enjoyed a 27% jump thanks to the blockbuster success of Spider-Man: Homecoming . Above all else, Sony's music business posted a 38% revenue gain and doubled its operating profits, based on strong results in the Japanese market for streaming music services.

Last night, Sony shares looked expensive at 42 times trailing earnings. Today, the stock is trading at a more affordable 25 times earnings, even after the morning's impressive price jump. Based on this report's tea leaves, I wouldn't be surprised to see Sony's good times rolling through the holidays.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sony Corporation Stock Quote
Sony Corporation
SONY
$86.88 (-0.32%) $0.28

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
394%
 
S&P 500 Returns
127%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.