By Kosaku Narioka
Nintendo is scheduled to report second-quarter results on Tuesday. Here’s what you need to know:
NET PROFIT FORECAST: Nintendo is expected to post a 35% drop in net profit to 72.48 billion yen ($484.7 million) for the three months ended Sept. 30, according to a poll of analysts by Visible Alpha. That’s compared with Y111.47 billion net profit in the year-earlier period.
REVENUE FORECAST: Second-quarter revenue is estimated to have decreased 9.1% from a year earlier to Y317.67 billion, according to the Visible Alpha poll.
WHAT TO WATCH:
–MARGIN: First-quarter operating-profit margin improved to 40.2% from 33.1% a year earlier as increases in advertising costs and research and development expenses were offset by revenue growth thanks to the success of the latest “The Legend of Zelda” game and a Super Mario film. Investors are paying attention to any further improvement in margins as businesses globally deal with high inflation.
–SWITCH: Nintendo sold 3.91 million Switch consoles in its first quarter, up from 3.43 million a year earlier, and has projected sales of 15.0 million consoles for the fiscal year ending March 2024. Investors are focusing on the pace of console sales ahead of the holiday shopping season.
–GUIDANCE: In August, the videogame maker maintained its earnings forecasts for this fiscal year, projecting that revenue would fall 9.5% to Y1.450 trillion and net profit would decrease 21% to Y340.00 billion. Investors are focusing on any changes to annual guidance that management may make.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
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