Sony (SNE) PS4 Outsells Microsoft (MSFT) Xbox One 2-to-1

NEW YORK (TheStreet) -- Sony (SNE) says it sold nearly twice as many next-generation video game consoles as Microsoft (MSFT) in January.

Sony was falling 1% to $17.03 and Microsoft was gaining 0.1% to $17.62 Friday.

A report published by the NPD Group said Sony's PlayStation 4 was the bestselling video game console in the month of January, beating out the Microsoft Xbox One. While NPD doesn't attach numbers to console sales, Sony senior vice president of PlayStation brand marketing Guy Longworth said in a statement that PlayStation 4 sales were nearly double "the nearest next-gen competitor."

"Although PS4 remains severely constrained at retail," Longworth continued, "we are working hard to refresh supply as quickly as possible."

While Microsoft was second in terms of console sales in the month, the company said it was happy with game sales for its Xbox consoles, including both the Xbox One and Xbox 360. Corporate vice president of marketing strategy and business for Microsoft Yusuf Mehdi said that Xbox "sold the most games across all console platforms in January with 2.27 million units sold, making up 47% of software market share."

Must read: Amazon Could Be Preparing a Video Game Console

TheStreet Ratings team rates SONY CORP as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate SONY CORP (SNE) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including poor profit margins and relatively poor performance when compared with the S&P 500 during the past year."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has increased to $1,223.24 million or 28.12% when compared to the same quarter last year. In addition, SONY CORP has also modestly surpassed the industry average cash flow growth rate of 22.92%.
  • The debt-to-equity ratio is somewhat low, currently at 0.61, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that SNE's debt-to-equity ratio is low, the quick ratio, which is currently 0.54, displays a potential problem in covering short-term cash needs.
  • SONY CORP has improved earnings per share by 5.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, SONY CORP turned its bottom line around by earning $0.30 versus -$5.52 in the prior year. For the next year, the market is expecting a contraction of 220.0% in earnings (-$0.36 versus $0.30).
  • In its most recent trading session, SNE has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • The gross profit margin for SONY CORP is currently extremely low, coming in at 3.01%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.07% trails that of the industry average.
  • You can view the full analysis from the report here: SNE Ratings Report

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