By Kosaku Narioka
Nintendo is set to release its third-quarter results on Tuesday, and analysts have their predictions ready. Here’s what you need to know:
Net Profit Forecast
According to a poll conducted by Quick, analysts expect Nintendo to report a 13% increase in net profit, reaching ¥130.37 billion ($878.6 million) for the three-month period ending on December 31. This compares to ¥115.78 billion net profit in the same timeframe the previous year.
The Quick poll suggests that third-quarter revenue may have fallen by 10% from the previous year, amounting to ¥573.78 billion.
Nintendo’s stock has seen a 15% increase thus far in 2024, following an 18% gain in the October-December period. As of Friday’s closing, shares stood at ¥8,476.0.
Key Points to Watch:
1. Operating-Profit Margin
In the first half of the fiscal year, Nintendo’s operating-profit margin improved to 35.2% from 33.5% in the previous year. This improvement happened as revenue outpaced the rise in selling, general, and administrative expenses. Investors will be closely monitoring any further enhancement in margins, considering the challenge of combating high inflation faced by businesses worldwide.
2. Sales Estimates for Switch Software and Consoles
For the fiscal year ending in March, Nintendo anticipates selling 185.0 million copies of Switch software and 15.0 million Switch consoles. The company has also projected a slight decline of 1.4% in fiscal-year revenue to ¥1.580 trillion, with net profit expected to drop by 3.0% to ¥420.00 billion. Investors will be interested in any updates or modifications to these annual sales and earnings forecasts following the holiday shopping season.
3. Revenue Growth in Mobile and Intellectual Property
In the first half of the fiscal year, revenue derived from mobile and intellectual property doubled to ¥55.0 billion compared to ¥23.5 billion in the previous year. This growth was partly driven by the success of “The Super Mario Bros. Movie” since its release in April. Investors will be closely monitoring the pace of growth in intellectual property revenue.