Investing.com – Shares of the Japanese electronics conglomerate Sony Corp (TYO:) shares rose sharply on Wednesday after announcing a massive share buyback and stock split, offsetting weak annual earnings and middling guidance.
Sony shares jumped 10% to 13,170.0 yen, a nearly two-month high. Stocks were the biggest boost to the index, which rose 0.5%.
US-listed shares of Sony (NYSE:) rose 6% in intraday trading.
Sony said it would buy back 250 billion yen ($1.6 billion) of shares and carry out a five-for-one stock split.
This comes as the entertainment and electronics conglomerate’s operating profit fell 7% due to weakness in its life insurance division. Sony plans to spin off the division in 2025.
But Sony’s earnings have also been hit by growing weakness in the gaming sector amid a broader industry downturn. Video games make up about a quarter of Sony’s total revenue, and sales of the PlayStation 5 are expected to be sluggish as it enters its fourth year of production.
But weaker PS5 sales mean Sony will also see smaller hardware losses from console sales, with Sony forecasting a 7% increase in profit.
The firm also forecasts earnings growth for its chips business to grow by 40% in fiscal 2025.