Nintendo Expected to Post 1.1% Decline in First-Quarter Net Profit — Earnings Preview

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By Kosaku Narioka

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Nintendo Co. is scheduled to report its first-quarter results on Wednesday. Here’s what you need to know:

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NET PROFIT FORECAST: Nintendo is expected to post a 1.1% decline in net profit to 91.71 billion yen ($688.3 million) for the quarter ended June 30, according to a poll of analysts by Quick. That’s compared with net profit of Y92.75 billion a year earlier.

REVENUE FORECAST: Revenue is estimated to have risen 1.5% from a year earlier to Y327.53 billion.

WHAT TO WATCH:

–SWITCH SALES: Nintendo said in May that it expected to sell 21.0 million Switch consoles for the fiscal year ending March 2023, down from 23.1 million the previous fiscal year. Nintendo President Shuntaro Furukawa said then that supplies of semiconductors and other components remained tenuous. Investors are closely watching any improvement in supply-chain issues and their implications for sales projections.

–OUTLOOK: Nintendo forecast in May for net profit to drop 29% to Y340.00 billion this fiscal year, as it projected weaker sales of Switch consoles and software copies. Investors are focusing on any changes that management may make to annual guidance.

–MOVIE BUSINESS: Nintendo’s announcement in July to acquire Tokyo-based Dynamo Pictures has raised speculation among some analysts that the company may be interested in the movie-development business. Investors are paying attention to any fresh initiatives by the company to monetize its intellectual property beyond game sales.

Write to Kosaku Narioka at [email protected]

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Credit: www.marketwatch.com /

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