Japan's Nintendo, maker of the hit Wii game machine, said yesterday fourth-quarter profit jumped 60%, but it forecast only modest annual growth of 9% as sales of its DS handheld machine slows.
The conservative projection comes despite a jump in sales for the Wii console, which has so far outsold Sony's PlayStation 3 and Microsoft's Xbox 360 since its launch in late 2006.
Kyoto-based Nintendo said operating profit for the January-March quarter surged to yen93.2 billion, handily beating a Reuters Estimates consensus of yen82 billion from 19 analysts.
But the company, valued at around $81 billion, expects profit to climb to yen530 billion this business year, 6% below the average analyst estimate of yen566.5 billion.
"The numbers themselves are a bit of a disappointment," said KBC Securities analyst Hiroshi Kamide.
Production boost
Analysts have said Nintendo's wildly popular Super Smash Bros Brawl fighting game and the imminent launch outside Japan of the Wii Fit home fitness program are expected to drive sales and help Nintendo shrug off unfavourable currency rates.
While Sony's PS3 may gain momentum on the back of new software titles and its Blu-ray capability for next-generation high-definition movie discs, that is seen having little impact on sales of the Wii, which is targeted at a different market.
Nintendo said revenue should increase 8% to yen1.8 trillion and forecast global Wii sales would increase 34% to 25 million units this business year, while targeting a 48% jump in software sales to 177 million units.
It also said it may ramp up Wii monthly production capacity to 2.4 million units by summer from 1.8 million units currently.
But it said annual sales of its DS handheld player would likely fall to around 28 million units from 30.3 million.
Nintendo shares have fallen 12% so far this year in line with a drop in the Nikkei average, but have gained more than 60% in the past 12 months.
The stock closed down 1.4% at yen57 900 yesterday ahead of the results. The Nikkei fell 0.3%.
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