Nintendo Returns to Full-Year Profit
Helped by a weaker yen, the company is back in the black, but sales of the Wii U and 3DS consoles missed targets.
TOKYO -- Nintendo swung back into profit for the year in March, recording net income of $71 million (7.1 billion yen) after posting its first-ever annual loss as a public company last year. The figures, announced by the Kyoto-based game maker Wednesday, beat analyst expectations, but income was half of what the company had forecasted in January.
Sales fell 1.9 percent to $6.4 billion (635.4 billion yen) as the Wii U and 3DS consoles failed to meet targets. Nintendo’s bottom line was boosted by the weakening of the yen, which has fallen sharply against the dollar and euro over the last six months. The weaker yen raises the value of its overseas earnings when it repatriates them to Japan.
Operating income, which is regarded by some as a better guide to a company’s underlying financial health, remained in the red to the tune of $364 million, largely unchanged from last year.
The company is forecasting strong growth in sales to $9.24 billion (920 billion yen) and net income of $550 million for the current financial year, which ends March 2014. Many analysts, though, will question where the company is going to find sales growth of almost 45 percent with dedicated consoles continuing to struggle against the rise of gaming on smartphones and tablets.
Nintendo stock climbed $6 (600 yen) to $120 on the Tokyo Stock Exchange, which closed at 3 p.m., before the earnings announcement. Nintendo has risen 25 percent since the beginning of the year, approximately in line with the benchmark Nikkei 225, which closed at a five-year high of 13,843.5 on Wednesday.