|Bid||74,700.00 x 0|
|Ask||74,800.00 x 0|
|Day's range||74,100.00 - 74,800.00|
|52-week range||40,100.00 - 86,800.00|
|Beta (5Y monthly)||0.93|
|PE ratio (TTM)||N/A|
|Forward dividend & yield||3,002.00 (4.03%)|
|Ex-dividend date||30 Mar 2021|
|1y target est||43,833.00|
(Bloomberg) -- Nintendo Co. shares slid as it warned that component shortages could affect production and gave a conservative profit forecast for the year, overshadowing better-than-expected earnings for the past quarter.The Kyoto-based studio forecast a 22% drop in operating profit in the current fiscal year, to 500 billion yen ($4.6 billion), significantly below analysts’ expectations. Nintendo, like many Japanese companies, often begins the year setting expectations low so it has room to upgrade its outlook later.Shares fell as much as 3.1% in Friday trading in Tokyo following the cagey outlook and chip warning, extending a 6.4% decline for the year. “There has been considerable stock market pessimism about Nintendo’s longer-term prospects,” Citigroup analyst Kota Ezawa wrote in a note after the results. “The possibility is emerging of positives finally drying up.”The company is targeting sales of 25.5 million consoles in the year ending March 2022, having sold 28.8 million units in the prior period. Internally, Nintendo’s management is shooting for production of between 28 and 29 million consoles, according to people familiar with the projections who asked not to be named disclosing company targets.Nintendo’s results do suggest that the Covid-era boom in gaming that turned Animal Crossing: New Horizons into a global online town hall has legs. It reported operating income of 119.5 billion yen for the March quarter, trouncing the average forecast of 68.3 billion yen.President Shuntaro Furukawa told reporters on Thursday that Nintendo wasn’t able to produce as many Switch devices as it had hoped due to component shortages. Recent demand has been higher than the company anticipated and the console hasn’t yet reached its peak, he added. Nintendo’s goal is now to surpass its official target of selling 190 million software units this year.The handheld-hybrid Switch maintained momentum in the face of newer gaming machines from Sony Group Corp. and Microsoft Corp., both of which have also suffered from chip shortages limiting production. Buoyed through most of 2020 by Animal Crossing’s runaway success, Nintendo’s signature device rode blockbuster titles including Capcom Co.’s latest Monster Hunter installment and Konami Holdings Corp.’s Momotaro Dentetsu during the most recent quarter.Nintendo’s own product lineup has been relatively quiet in recent months. Bloomberg News has reported that the company plans a big rollout of new titles alongside an upgraded version of the aging Switch -- with a faster Nvidia chip and a Samsung OLED display -- in the latter half of the year. The original console is now more than four years old and was joined by a more affordable Switch Lite variant in late 2019.What Bloomberg Intelligence SaysNintendo needs to drive software sales, live services and mobile games to support earnings growth beyond this fiscal year ending March, in our view, as the Switch platform enters the mature phase of its cycle. Switch hardware sales may peak in 2020 absent a reported but as yet unconfirmed Pro version, putting greater onus on software to drive profit.- Matthew Kanterman and Nathan Naidu, analystsClick here for the research.Read more: Nintendo Is Said to Target Record Year in Switch, Game SalesThe coronavirus outbreak was at first a brake and then an accelerant for Nintendo, choking its supply chain before triggering a demand surge with global lockdowns driving people to seek entertainment and escape. The company’s hardware sales improved by 37% and its software sales also rose 37% to 231 million units over the past fiscal year. It increased its proportion of sales coming from digital downloads to 43% from the previous 34%.(Updates with share price and analyst comment in third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Europe was naive to outsource so much of its semiconductor design and manufacturing to other regions and needs to redress the balance, the European Union’s top industry official said.Industry Commissioner Thierry Breton said a global chip shortage that’s disrupting the car industry and supplies of electronic goods is proof that it’s time to act.“We want to come back to our former market share of production for the needs of our industry,” Breton said in an interview with Bloomberg News. Europe’s share of semiconductor manufacturing has dropped over the years because the region has been “too naive, too open,” he said.The European Commission, the EU’s executive body, laid out plans Wednesday to diversify supply chains and carry out regular sector reviews to tackle its lack of industrial independence in strategic areas including semiconductors.An analysis it published at the same time showed the region’s semiconductor supply chain is increasingly vulnerable to high barriers to entry in key industries, as well as trade tensions and a heavy reliance on Asian advanced chip manufacturing and U.S. chip design tools.The EU’s response should focus on clawing back design and production of semiconductors that power data processing, communication, infrastructure and artificial intelligence, the paper said.The commission plans to double chip production to at least 20% of world supply by 2030. Breton is trying to rally Europe’s leading chipmakers, research centers and more than a dozen EU governments behind the plans. At least 22 countries have already signed a letter of intent.The alliance will have to decide how to boost the design and production of 20-nanometer to 10-nanometer chips, which are smaller and more powerful than most that are currently manufactured in Europe, Breton said. Advances in manufacturing are measured in nanometers, or billionths of a meter, with smaller and smaller transistors crammed onto silicon wafers.In parallel, the EU will work on plans to produce the next generation of leading-edge chips by 2030. Officials are targeting production below 5-nanometers down to 2-nanometers, an ambitious goal not yet reached by industry leaders Taiwan Semiconductor Manufacturing Co. and South Korea’s Samsung Electronics Co.Uphill BattleProducing even 20nm chips will be a challenge for most European semiconductor companies, which have long outsourced production at that scale, said Jan-Peter Kleinhans, head of technology and geopolitics at think tank Stiftung Neue Verantwortung. He said the companies’ automotive and industrial customers may need to be willing to pay more for chips “made in the EU.”And not all European chip companies are keen to sign up to the EU’s plans. STMicroelectronics NV Chief Executive Officer Jean-Marc Chery told BFM TV on Tuesday his firm was unlikely to join the alliance.“If it’s about advanced technologies, we don’t have any reason to participate. That’s marginal to our activities,” said Chery.Europe once accounted for a big chunk of semiconductor manufacturing, but that’s collapsed from a global market share of around 44% in 1990 to closer to 10% today. Taiwan, South Korea and Japan account for about 60% of production, according to the Boston Consulting Group and the Semiconductor Industry Association. European chip designers including NXP Semiconductors NV and Infineon Technologies AG now outsource most production to TSMC and other foundry operators. The decline partly reflects the waning of Europe’s consumer technology sector, including the failure of Nokia Corp. and Ericsson AB’s once-popular mobile phones, according to Kleinhans.Now Europe’s auto industry has been hit hard by the global chip shortage. Ford Motor Co. said Monday it would halt output at German plants for several weeks due to a chip shortage, joining a growing list of manufacturers idling factories.While the EU’s semiconductor strategy is aimed at cutting reliance on foreign suppliers, its plan to go below 5 nanometers is so ambitious that the bloc will need help from those same players. Companies like TSMC have dedicated years of research and invested billions of dollars to develop their expertise.“We know that to go there, it will be better to do this with partners,” Breton said of the 2-nanometer goal. He said the strategy is like “going to the moon.”Intel Corp., the world’s largest chipmaker, has backed the EU’s plans. It’s already expanding 7nm production in Europe and is also considering building a state-of-the-art semiconductor foundry in the region. But the company has struggled to advance its manufacturing in recent years, and its CEO suggested last week the company would likely need hefty financial support from European governments to invest in the bloc’s strategy.An Intel spokesman pointed to companies in Asia that get roughly 40% of the costs of building a new factory subsidized by the state. A new factory costs at least $10 billion and it would need two of them in one location to take advantage of economies of scale, the spokesman said.(Updates with EU announcement from fourth paragraph, STMicro and analyst comments)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Despite the growth, the company warned the impact of the global shortage in semiconductor chips, prevented a stronger rebound from industrywide plant shutdowns due to the pandemic.