Nintendo Reports Blowout Numbers, But Guidance Disappoints
Last Friday, shares of Nintendo (OTC: NTDOY) fell, even as the gaming giant reported a sales surge for its recent quarter and fiscal year. Chalk it up to management's dour outlook for the upcoming year, in which Nintendo anticipates declines in revenue, operating profits, and dividends.
Nintendo's management is known to be conservative, both in terms of its guidance and its business strategy. Though Nintendo's core console and software businesses are doing quite well, the company has been slow to enter the booming mobile gaming category, or exploit its beloved IP through other avenues, though it's beginning to take baby steps in both of those directions.
That's what attracted activist investor ValueAct Capital to recently take a $1.1 billion stake in the video game giant in the first quarter. It's unclear whether Nintendo is merely being conservative, or whether the current Switch console cycle has hit its ceiling as the COVID-19 pandemic leads to a slowdown in consumer spending.
Source Fool.com
