With all manner of people talking about Nintendo’s stellar profits, there is one segment of the population that still questions Nintendo’s financial future: analysts. The main reason for the aura of disappointment around the company is that Nintendo’s predictions of its net income over the course of the next financial year do not meet the predictions of several analysts. And nothing makes an analyst more sore than being told he might be wrong.
Analysts worrying over the future isn’t too surprising given that the company’s stock has fluctuated in price dramatically. It isn’t really a matter of doom and gloom though. Analysts aren’t worried that Nintendo is losing market share or heading toward the red. Their criticism of the company is more subtle and reflects that companies which consistently perform above expectations are expected to continue doing so ad infinitum:
Net income will probably climb 26 percent to 325 billion yen ($3.14 billion) in the 12 months ending March 31, 2009, Nintendo said today. That missed the 337.1 billion yen median estimate in a Bloomberg survey of six analysts. Sales may gain 7.6 percent to 1.8 trillion yen, the slowest growth in three years.
Such slow growth cannot almost certainly be attributed to the issues Nintendo has with being a company focused on export in a global economy where the yen is gaining steam. Indeed, according to one analyst in particular, much of the blame for the forecast shortfall can be attributed to the rising yen and the swooning dollar:
“The profit growth figure is weaker than I’d expected,” said Yoshihisa Okamoto, a Tokyo-based fund manager at Mizuho Asset Management Co., which oversees $26 billion of assets, including Nintendo shares. Currency fluctuations and weaker U.S. demand contributed to the slower-than-expected growth, said Okamoto, who had estimated profit of 350 billion yen.
On a positive note for Nintendo, in addition to the scads and scads of money (though not enough money to satisfy analysts), the company will soon push that silly Sony out of the the top slot for console success:
The company will probably overtake Sony in worldwide sales of home video-game consoles this fiscal year as the Wii extends its lead over the PlayStation 3, according to Daiwa Institute of Research Ltd.
Take that analysts. What’s the problem? Nintendo just isn’t printing money fast enough for you?
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