Sony Anticipates $682 Million Decrease in Operating Income Due to Tariffs

Sony detailed its fourth-quarter 2024 financial results today, reflecting a 24% decline in year-over-year consolidated sales. However, Sony’s imaging-related segments held steady. Unfortunately, the company also shared the anticipated impact of tariffs — a massive operating income reduction.

In supplemental financial report materials, Sony has tempered its previous FY2025 forecasts, reducing sales by 3% based on expected worse performance in Game and Network Services (G&NS) and ET&S segments. However, Sony believes its operating income will remain steady, albeit significantly worse, thanks to tariff impacts, which Sony believes will account for a staggering $682 million operating income reduction.

Before the tariff impact, Sony projected a 103.4 billion yen ($705 million) increase in operating income in FY2025 compared to FY2024. However, after the effect of tariffs is considered, that projection drops to a mere 3.4 billion yen increase ($23 million). While $23 million sounds like a lot of money, for Sony, it isn’t.

Worse yet, Sony expects net income attributable to Sony Group Corporation stockholders to decrease 13% compared to FY2024 — a 137.4 billion yen ($936 million) reduction.

While the situation surrounding tariffs remains fluid and uncertain, companies like Sony and Canon are scrambling to keep investors apprised of the most realistic, up-to-date expectations. It is impossible to know how U.S. tariffs on Japan will shake out once the current 10% rate expires in July, but companies must be worried that the tariffs could increase. The U.S. is by far Sony’s largest market in terms of overall sales across all segments, so changes in the American economy are significant.

As for Sony’s performance in FY2024, it is a mixed bag, but photo-related segments generally performed well.

Sony’s Alpha-series cameras fall under the Entertainment, Technology, and Services (ET&S) umbrella, while the company’s image sensor operations are part of the aptly named Imaging and Sensing Solutions (I&SS) segment.

While ET&S saw a slight dip in operating income in the fourth quarter, its overall fiscal year 2024 performance was positive, delivering a profit of 190,926 million yen, or nearly $1.3 billion. I&SS was positive throughout the year and finished FY2024 with an operating income of 261,174 million yen, around $1.78 billion.

Sony breaks down ET&S a bit further, separating it into televisions, audio and video, still and video cameras, mobile communications, and the ever-present “other.” Still and video camera sales delivered 665,144 million yen of sales to external customers in FY2024, which is nearly $4.53 billion at current exchange rates. This is about a 3% increase compared to FY2023.

Image credits: Sony