July 31, 2018 / 7:56 AM / a year ago

Nintendo profit beats as weak Switch consoles offset by title sales

TOKYO (Reuters) - Nintendo Co (7974.T) reported a better than expected 88 percent jump in first-quarter operating profit as sales of Switch game titles more than doubled, offsetting disappointing sales of the console.

FILE PHOTO: Nintendo's character Mario is seen in the Nintendo store in New York, U.S., November 15, 2017. REUTERS/Brendan McDermid/File Photo

The results were the first to be announced under new president Shuntaro Furukawa who took the helm at Nintendo in June.

Nintendo’s results came shortly after Sony Corp (6758.T) reported a record first-quarter operating profit on the back of strong sales of gaming software.

Kyoto-based Nintendo said on Tuesday its April-June operating profit rose to 30.5 billion yen ($274.31 million), while six analysts on average forecast 22 billion yen, according to Thomson Reuters I/B/E/S data.

It sold 1.88 million Switch videogame consoles in the quarter, slightly weaker than some analysts expected. Deutsche Bank had previously forecast 2.5 million in sales, although sales-tracking data from Media Create had put the figure closer to 2.1 million.

Switch game titles like Donkey Kong Country: Tropical Freeze sold well in the quarter, helping overall sales of Switch game titles more than double from the year-ago quarter.

Nintendo maintained its forecast to sell 20 million consoles in the full fiscal year through next March.

The company’s shares have fallen 20 percent in the past three months on fear of poor Switch console sales. They fell sharply in June as the company’s presentation at the E3 gaming expo disappointed analysts.

New York-based hedge fund Melvin Capital Management recently took a short position on the shares with a nearly 0.8 percent stake, according to Tokyo Stock Exchange data.

Some analysts have said that the market’s concerns may be overdone, as sales momentum may pick up ahead of the holiday shopping season later this year as titles like Super Mario Party and Pokemon: Let’s Go series hit the shelves.

Reporting by Ritsuko Ando; Editing by Muralikumar Anantharaman

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