Nintendo shares hit after 1st quarterly loss

Reuters News
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Posted: Jul 28, 2011 9:24 PM
Nintendo shares hit after 1st quarterly loss

TOKYO (Reuters) - Shares of Nintendo Co Ltd fell over 20 percent in early trade on Friday, a day after the videogame maker slashed its full-year profit forecast far below market expectations after reporting its first-ever quarterly operating loss.

The forecast cut came as Nintendo posted weaker than expected sales of its 3D-capable handheld games player launched earlier this year, leading it to cut the price of the 3DS device in hopes of lifting demand.

Shares of the Kyoto-based firm fell 20.3 percent to 11,150 yen by midmorning, after earlier hitting 11,100 yen, its lowest intraday trading level since May 2004, wiping nearly 400 billion yen ($5.1 billion) off its market value.

On Thursday, Nintendo slashed its annual operating profit forecast to 35 billion yen from an initial forecast of 175 billion yen. The new estimate is far short of the previous consensus of 154.9 billion yen based on 24 analysts' forecasts before the release.

Shares of Sony Corp also fell on Friday a day after the Japanese consumer electronics firm slashed its outlook for TV sales and cut its full-year net profit forecast to 60 billion yen from 80 billion yen.

Brokerage CLSA cut its rating of Sony to "underperform" from "outperform" and lowered its target share price to 2,150 yen from 2,430 yen, saying the downgrade reflected "the stronger head winds from LCD panel and TV overcapacity as well as the strengthening yen."

Sony, the maker of Bravia TVs, slashed its annual forecast for LCD TVs to 22 million from 27 million and warned that annual losses in the division might widen from the previous year.

By midmorning Sony shares were down 2 percent at 1,973 yen, while the benchmark Nikkei was flat.

(Reporting by James Topham, Ayai Tomisawa and Mariko Katsumura)