Advertisement
YOU ARE HERE: LAT HomeCollections

Nintendo's First-Half Profit Drops 45%

November 22, 2002|Alex Pham | Times Staff Writer

Nintendo Co. said Thursday that it had lower revenue and profit for the six months ended Sept. 30, hurt by flagging sales of its Game Boy Advance hand-held game console, a weak Japanese economy, and a strong yen that devalued overseas revenue.

Net income fell 45% to $155 million, down from $280 million in the same period last year. Sales slumped 7.8% to $1.7 billion from $1.84 billion a year earlier. It has $3.8 billion in cash. The Kyoto, Japan-based company, which makes Pokemon video games and the GameCube video game console, reports results semiannually.

Nintendo shares were down 56 cents at $11.75 in U.S. over-the-counter trading.

Analysts say much of Nintendo's weakness can be attributed to soft sales in Japan, where the economy remains mired in a recession. Between April and September, unit sales in Japan of Game Boy Advance fell 61% compared with a year earlier, while GameCube sales dropped by one-third.

"The decline in sales was primarily in Japan," said Michael Pachter, an analyst with Wedbush Morgan Securities, which does not own Nintendo shares and does not conduct business with the company.

A rising yen also contributed to Nintendo's declining financials, since the company received 83% of its revenue from outside Japan. Between March 31 and Sept. 30, the yen gained 8% against the U.S. dollar, contributing to a $237-million loss due to currency conversions.

Nintendo, which sold 6.68 million GameCubes worldwide, is tied for second place with Microsoft Corp.'s Xbox in the console market. Sony Corp., with more than 40 million PlayStation 2 consoles sold, holds the No. 1 spot. Nintendo last month cut its profit forecast 11% to $657 million for the full year ending March 31.

Advertisement
Los Angeles Times Articles
|
|
|