Reutersin alkuperäinen juttu:
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Nintendo stock sags on bearish outlook
Fri January 24, 2003 01:42 AM ET
TOKYO, Jan 24 (Reuters) - Shares in Nintendo Co Ltd fell on Friday after the Japanese video game maker said it would not meet its sales target for its flagship GameCube home consoles in 2002/03.
Shares in Nintendo, the creator of "Pokemon" games, ended down 1.38 percent at 10,700 yen, compared with a 0.67 percent drop in the benchmark Nikkei average.
They have hovered between 10,000 and 12,000 this month as investors have grown concerned about the Gamecube's outlook, along with slowing overall demand in the U.S. video game market.
Nintendo President Satoru Iwata told Reuters on Thursday the GameCube console, which is in a three-way battle with Sony Corp's PlayStation 2 and Microsoft Corp's Xbox, was likely to miss its target of 10 million units by over 10 percent this business year and that GameCube software sales would fall short of a 55-million-unit goal. The bearish outlook for the year to end-March contrasts with that of arch rival Sony, whose PlayStation 2 game system sold 8.5 million during the key shopping season in November and December, up 24 percent from a year earlier.
"GameCube is indeed suffering, but I think expectations were set too high. This new target seems about right to me," a senior fund manager at a domestic asset management firm said, referring to Iwata's comment, which implied sales of below nine million.
Iwata said the cash-rich company would buy back its own shares when the stock fell excessively and aimed to raise profits in its core business to shore up the price over the long term.
Nintendo, which had cash and cash equivalent worth nearly 780 billion yen ($6.61 billion) at the end of September, had bought back 4.65 million shares for 54 billion yen by the end of December.
Nintendo's shareholders gave approval in June for it to buy back up to 14 million shares -- nearly 10 percent of its total outstanding shares -- or up to 250 billion yen worth.
"Nintendo has held too much of its assets in cash and that has been a focus of the market. From that standpoint, the comment about stock buy-backs is positive," the fund manager said.
Analysts and investors agree the stock is undervalued but they do not feel motivated to buy it.
"Valuation-wise, Nintendo shares look reasonably attractive and I expect them to continue trading in a range between 10,000 yen and 12,000," said Takehiko Takachio, senior portfolio manager at Kokusai Asset Management.
"Game Boy Advance gives them steady revenue but investors want to see some new ideas before pushing the stock any higher."
Eiji Maeda, senior analyst at Daiwa Institute of Research, said foreign investors, especially Europeans, were increasingly focusing on value rather than growth, and they saw Nintendo's stock as undervalued given its high cash position.
"If Nintendo is to use its cash, it should probably consider raising its dividend to appeal to investors rather than buy back shares," he said.
Asked on Thursday whether the company planned a dividend increase, Iwata said: "No...We believe Nintendo provides an appropriate dividend yield compared with the current super-low interest rate." ($1=118.06 Yen)
