Nintendo Expected to Report Lower First-Quarter Net Profit

Dow Jones08-05
 
 

Nintendo is scheduled to report first-quarter results on Thursday. Here is what you need to know:

 

NET PROFIT: Nintendo's first-quarter net profit is expected to have dropped 23% to 74.4 billion yen, equivalent to $471.7 million, according to a poll of analysts by Visible Alpha. Net profit was Y96.03 billion a year earlier.

REVENUE: Revenue is estimated to have fallen 22% to Y448.7 billion, according to Visible Alpha.

Shares of the videogame maker have declined 29% this year through Tuesday, weighed by concerns about higher costs of memory chips.

 

WHAT TO WATCH:

--For the year ending March 2027, the company has projected selling 16.5 million Switch 2 consoles, down from the 19.9 million units sold the previous fiscal year. It has estimated sales of 60.0 million software copies for the new device, up from 48.7 million in the prior fiscal year. Investors will be closely watching any updates on sales, production and software plans for the device.

--Nintendo has projected revenue to drop 11% to Y2.050 trillion and net profit to fall 27% to Y310.00 billion this fiscal year. Investors will be focusing on any changes management may make to the annual guidance. Discussions on a shortage of memory chips and any potential impact from the Middle East conflict will also be scrutinized.

--Intellectual property-related income dropped 9.7% to Y73.5 billion last fiscal year. Investors will be watching for signs of recovery in intellectual-property income as Nintendo tries to diversify its revenue streams beyond videogames.

 
 

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