By Kosaku Narioka
Nintendo is set to release its second-quarter results on Tuesday. Here are the key details:
Net Profit Forecast
Nintendo is expected to see a 35% decline in net profit, reaching 72.48 billion yen ($484.7 million) for the three months ending September 30. This is based on an analyst poll conducted by Visible Alpha. In the same period last year, Nintendo's net profit stood at Y111.47 billion.
The estimated revenue for the second quarter is projected to have dropped by 9.1% compared to the previous year, amounting to Y317.67 billion, according to the Visible Alpha poll results.
What to Watch For:
The first-quarter operating-profit margin showed an improvement, rising to 40.2% from 33.1% the previous year. This increase was a result of revenue growth driven by the success of "The Legend of Zelda" game and a Super Mario film, which counterbalanced the rising advertising and research and development expenses. With global businesses facing high inflation, investors will eagerly observe any further changes in margins.
Nintendo sold 3.91 million Switch consoles during the first quarter, surpassing the previous year's figure of 3.43 million. The company's sales projection for the fiscal year ending March 2024 is set at 15.0 million consoles. Investors will closely monitor the pace of console sales leading up to the holiday shopping season.
In August, Nintendo maintained its earnings forecasts for this fiscal year. They predicted a 9.5% decrease in revenue to Y1.450 trillion and a 21% decrease in net profit to Y340.00 billion. Any potential alterations to the annual guidance provided by management will be of significant interest to investors.