Shares of Japan's Nintendo, SoftBank and Sharp tumble after earnings
Reuters
Published Feb 07, 2023 07:47PM ET
Updated Feb 07, 2023 10:01PM ET
TOKYO (Reuters) -Shares of Japan's Nintendo Co Ltd (TYO:7974) and SoftBank Group Corp and Sharp (OTC:SHCAY) Corp fell steeply on Wednesday, after the companies jolted investors with disappointing results, emphasising the dim demand outlook for global tech firms.
Shares of Nintendo dropped 6% after the maker of the Switch (NYSE:SWCH) video game console reported lower sales and profit and cut its full-year outlook. It also cut its sales target for the Switch console. Nintendo shares were on track for their biggest one-day loss since November.
SoftBank shares fell 6.2% after it reported a quarterly loss, hit by its massive Vision Fund investment unit, which fell into the red for the fourth straight quarter. The global tech investor also gave a cautious outlook.
Sharp Corp was also hit, tumbling 11.2% and putting it on track for its biggest one-day drop in 3-1/2 years.
The maker of displays and telecoms equipment, a unit of Taiwan's Foxconn, reported a quarterly operating loss and said it expected a loss for the full year.
The results from the three companies illustrate how tech firms have been squeezed by a downturn in consumer demand driven by rising inflation and interest rates.
Nintendo is struggling with softer sales for the ageing Switch, while SoftBank has seen valuations weaken for its sprawling tech portfolio.
"The situation remains tough," SoftBank Chief Financial Officer Yoshimitsu Goto told a briefing following results on Tuesday, referring to the broad difficulties for the tech sector.
The technology company declines pulled the Nikkei 225 index into slightly negative territory.
"The Nintendo Switch is now a six-year-old console and demand is now exhausted," analyst Mark Chadwick said on Smartkarma.
"Our thesis is that the hardware cycle has peaked and that the share price will head lower in tandem with the dwindling top line."
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Written By: Reuters
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