Nintendo earnings beat the market as it ups sales target for the Switch console to 14 million units – CNBC

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Game enthusiasts and industry personnel walk past the Nintendo Switch exhibit during the Electronic Entertainment Expo E3 on June 13, 2017 in Los Angeles.

Nintendo reported better-than-expected revenues and operating profit for the September quarter on Monday, while raising its own forecasts including for sales of its flagship Switch console.

The Japanese electronics giant reported the following results for its fiscal second quarter:

  • Revenue of 219.9 billion Japanese yen ($1.9 billion) versus 174 billion yen expected, according to Reuters estimates
  • Operating profit of 23.7 billion yen versus 19 billion yen expected, according to Reuters estimates

Nintendo reported a loss in the same period last year.

The strong results were helped by continued strength of the Nintendo Switch console. Nintendo said it sold 2.9 million Switch units in the quarter, bringing the total number sold so far to 7.63 million units. The company said it also sold 22.02 million Switch games in the last six months.

Nintendo was aiming to shift 10 million Switch consoles in its fiscal year which ends in March 2018. Due to the strong reception so far, Nintendo upped its forecast to 14 million units.

It also raised its outlook for the financial year. Net sales will now be 960 billion Japanese yen, a 28 percent rise from the 750 billion yen it previously forecast. And Nintendo said operating profit is expected to be 120 billion yen, up 84 percent from the 65 billion yen first forecast.

After struggling in 2015, Nintendo has been on a turnaround path, focusing more seriously on smartphone games, and the new Switch console. It has released a number of high-profile mobile games including “Super Mario Run” and “Fire Emblem Heroes.” The strategy is paying off. Nintendo said that its smart device and intellectual property-related income was 17.9 billion yen, a 426 percent year-on-year increase.

Top games like “The Legend of Zelda: Breath of the Wild” and “Mario Kart 8 Deluxe” have helped boost Switch sales.

And investors are rewarding the company. Nintendo shares are up 74 percent year-to-date.

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