Michael Pachter: Nintendo Delivers Weak Earnings
According to analyst Michael Pachter at Wedbush Morgan, Nintendo (PINK:NTDOY) came in weak on earnings.
Here’s Pachter’s bullet points for a preview of Nintendo’s earnings announcement:
- Weak Q3 due to sluggish DS sales and negative F/X.
- In spite of the earnings shortfall, the company maintained FY:11 guidance for revenue of 1,100 billion, operating income of 210 billion, and EPS of 704.
- Maintaining our FY:11 estimates for revenue of 1,100 billion and EPS of 713, as we expect Nintendo to offset its Q3 miss through robust initial sales of the 3DS in Q4.
- Nintendo adjusted its FY:11 units guidance for DS and Wii. For hardware, Nintendo now expects to sell 22.5 million DS units (down from 23.5 million units) and 16 million Wii units (down from 17.5 million units).
- The 3DS should help Nintendo overcome weak guidance and unfavorable F/X.
- Maintaining our NEUTRAL rating and 22,000 price target, which reflects a forward P/E multiple of 10x our FY:12 adjusted EPS estimate of 1,300, plus 9,000/share in cash.
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