By Kosaku Narioka
SoftBank Group posted a $7.7 billion quarterly profit, supported by gains in its tech investments, and is getting ready for bigger investments.
The Japanese technology investment company returned to a net profit in the three months ended September, it said Tuesday, helped by gains in its stakes in e-commerce company Coupang, Chinese ride-hailing company DiDi Global and T-Mobile US, compared with a net loss in a year earlier.
SoftBank Group Chief Financial Officer Yoshimitsu Goto said at a briefing that strong earnings results improve its financial footing, allowing it to make bigger investments selectively at the right time. "We are preparing to take advantage of various opportunities," he said.
SoftBank invested about $500 million in OpenAI through its Vision Fund 2 when the startup behind ChatGPT raised $6.6 billion in a recent round of new funding.
While the investment was modest, Goto on Tuesday described it as significant and said it will help strengthen SoftBank's relationship with OpenAI.
In October, SoftBank Group Chief Executive Masayoshi Son reiterated his bullish forecasts for AI, saying he believed artificial general intelligence, in which computers have human-level cognitive abilities, would be achieved in two to three years.
The company and its tech funds have begun investing more aggressively in recent months after a yearslong defensive strategy, as tech stocks have risen thanks to artificial-intelligence enthusiasm and the Federal Reserve's rate cuts.
SoftBank Group reported second-quarter net profit of 1.180 trillion yen, equivalent to $7.68 billion, compared with a net loss of Y931.11 billion a year earlier. That was sharply higher than the Y199.3 billion estimated net profit in a poll of analysts by data provider Visible Alpha.
SoftBank's Vision Funds business swung to a profit of Y373.14 billion from a loss of Y258.86 billion in the year-ago period.
Its bottom line last year was weighed by losses related to office-sharing company WeWork's bankruptcy in the U.S.
SoftBank's earnings are susceptible to fluctuations in tech stocks. It reported a first-quarter net loss after two consecutive quarters of net profits.
Last week, subsidiary Arm Holdings posted a quarterly net profit of $107 million, compared with a net loss a year earlier, boosted by sales of increasingly complex chips crucial for AI applications.
SoftBank Group's stake in Arm now makes up a big chunk of the Japanese investment company's portfolio after it cashed in on its stake in Alibaba Group Holding over the years and reduced its concentration in China.
Shares in SoftBank have gained about 50% this year, fueled by enthusiasm over rising AI-related demand at the company's investees, including Arm.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
(END) Dow Jones Newswires
November 12, 2024 05:52 ET (10:52 GMT)
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