What happened

Sony Group (SONY 0.43%) investors beat the market on Tuesday. Their stock gained 10% by 3:30 p.m. ET compared to a 0.5% drop in the S&P 500. That boost erased just a portion of recent losses for the Tokyo-based conglomerate, though. Shares remain down over 40%, or roughly double the decline in the wider market so far in 2022.

The rally was powered by an earnings report that was well received on Wall Street.

So what

Sony said in a pre-market filing that sales rose 16% in the fiscal second-quarter selling period, translating into accelerating sales growth compared to Q1. The company is seeing slightly better demand for its video games right now compared to last quarter, but players are still less engaged than they were a year ago. Its hardware division is enjoying better profitability thanks to price increases and cost cuts .

Demand is still strong for the latest iteration of its PlayStation gaming console, and executives see room to boost their annual production goal for the product. The streaming music business is booming, too. Overall, Sony's report shows that the company is continuing to set sales and earnings records despite slowing economic growth, inflation, and other pressures.

Now what

Management boosted their fiscal-year outlook on both the top and bottom lines, and those increases help explain why the stock jumped on Tuesday. Revenue will land about 1% higher than originally predicted, and operating income will be about 5% above that prior forecast.

Investors had been worried that Sony might affirm or even reduce its fiscal-year outlook due to rising costs or the increased pressure on consumers from inflation. However, its latest results point to continued strength across several parts of its diverse business. As a result, it's no surprise that the growth stock rose immediately following the quarterly announcement.