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 A weaker yen also boosted the value of its overseas earnings, and
the company on Wednesday reported an operating profit of 9.3 billion
yen ($86 million) in its fiscal second quarter, compared with an 18
billion yen operating loss a year earlier. Analysts on average had
expected a 3.7 billion yen loss for July-September, according to
Thomson Reuters Starmine.
Ahead of the vital year-end holiday sales season, the results may
ease pressure on Chief Executive Satoru Iwata, who is recovering
from surgery in June to remove a tumor in his bile duct. As losses
mounted in recent years, Iwata, 54 and in the job since 2002,
resisted calls for a major overhaul to make famous Nintendo
characters like plumber Mario available for games on smartphones,
rather than just its own hardware.
As well as facing the challenge of free mobile games played on
phones and tablet computers, Nintendo has struggled to keep pace
with Sony Corp and Microsoft Corp, now dominant in the home video
console market.
Nintendo reiterated its forecast for a full-year operating profit of
40 billion yen, compared with an operating loss of 46.4 billion yen
in the previous year. Analysts have been skeptical on this year's
target, as well as the company's strategy, with the average estimate
prior to Wednesday's announcement being for a 24 billion yen profit.
On Wednesday, the company said sales of its Wii U home games
console, the latest version of its now-ageing Wii product, more than
doubled in the April-September period from a year earlier, rising to
1.1 million units.
Iwata told reporters that Wii U sales had improved since "Mario Kart
8", the latest game to feature Mario, went on sale in May. With the
year-end holiday sales period coming up, he said the company still
aims to sell 3.6 million of the consoles in the current business
year though March 2015.
"Through April to September we saw sales improve, especially
overseas in the U.S. and European markets," Iwata said of the Wii U.
"This year is different to last year, when we headed into the
year-end without momentum or good software prospects...The goal is
fully achievable."
Nintendo said it was also being helped by a cheaper yen, which
boosts the value of overseas sales. The yen's downward trend
inflated its operating profit by around 2 billion yen over the
April-September period, it said.
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RETURN TO HEALTH
In his first appearance before reporters since his surgery, Iwata
said he now felt well enough to resume regular work duties. The
executive was visibly thinner, but said his weight had stabilized
over the past two months.
"Of course it was a major illness and surgery, so compared to
before, I may shorten the time I'm at work, or perhaps I may cut
back on overseas business trips. But in terms of holding meetings,
considering strategy, and speaking publicly, I believe I've
recovered enough to work as I had before," he said.
As for the business itself, Iwata said Nintendo was heading in a
"good direction" ahead of the crucial holiday season.
The company's shares have fallen around 20 percent this year and
about 85 percent from their 2007 high, as the heyday Nintendo
enjoyed with the Wii console's then-hot status fades into the
distance.
Instead of radical strategic change, Nintendo has pinned hopes on
hit games such as "Mario Kart 8". The Wii U, the latest version of
the console that first hit the market in 2006, was launched in
December 2012, but sales had previously fallen short of projections.
The company also maintained its forecast to sell 12 million of its
3DS handheld game players this business year though March 2015.
(1 US dollar = 107.9900 Japanese yen)
(Writing by Ritsuko Ando; Editing by Kenneth Maxwell)
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