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Nintendo (NTDOY) increases sales and earnings guidance for FY 2022

Nintendo is out with their Q3 2022 earnings results, and the company is actually increasing guidance for both sales and earnings. Please take a look at the details.
Asif Khan
Asif Khan
5

Nintendo has just issued its financial results for the first three months of their fiscal year 2022, and the Big N has some good news for investors in the form of increased sales and earnings guidance.

Nintendo increased their financial forecast for both revenue and earnings for the fiscal year 2022 ending in March.

The company added this explanation in the Notice of Full-Year Financial Forecast and Dividend Forecast Modifications document posted to the official Nintendo Investor Relations website:

Based on the impact on Nintendo Switch hardware production due to the factors such as the semiconductor shortage and the sales performance of Nintendo Switch software for the actual and after, the Company modifies its financial forecast in consideration of the revised sales prospects as well as the revised assumed exchange rate.

The assumed exchange rate after the third quarter and at the end of the fiscal year has been revised from 105 yen to 110 yen per U.S. dollar. The assumed exchange rate for euro remains unchanged at 125 yen per euro.

The new modified financial forecast from Nintendo has a 4.2% decrease in hardware sales expectations and an increase of 10% for software unit sales.
The new modified financial forecast from Nintendo has a 4.2% decrease in hardware sales expectations and an increase of 10% for software unit sales.

Nintendo actually decreased its unit sales expectations for Nintendo Switch hardware by 4.2%, while increasing software sales expectations by 10%, citing issues related to chip shortages.

Nintendo shareholders can now expect a higher Year end dividend payout than the company had projected back in November 2021.
Nintendo shareholders can now expect a higher Year end dividend payout than the company had projected back in November 2021.

The company also increased its expected Year end dividend payout from 870 to 1,080 yen. This is still down from the year ago payout of 1410 yen, but the stock is currently set to pay out a 3% annual dividend yield based on today's update.

It's interesting to note that while the company is increasing its sales expectations by 3.1% from its previous guidance in November 2021, its profit projections have increased by 14.3%. This means that stock will appear even more valuable to anyone who may have thought that Nintendo (NTDOY) was cheap on a price-to-earnings (P/E) basis before today's earnings release. 

There were a lot of great tidbits of news in the full Nintendo Q3 2022 earnings report, including the Switch passing Wii in lifetime console sales. I mean, who could have seen that coming? Certainly no one on Shacknews. 

This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.

Full Disclosure:

At the time of this article, Shacknews primary shareholder Asif A. Khan, his family members, and his company Virtue LLC had the following positions:

Long Nintendo via NTDOY shares

CEO/EIC/EIEIO
CEO/EIC/EIEIO

Asif Khan is the CEO, EIC, and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Tendobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.

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