Solid Lineup to Aid Nintendo (NTDOY) This Earnings Season?

Zacks Equity Research

Nintendo Co. NTDOY is set to report results for the quarter ending March 2019 on Apr 25.

Notably, the company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 46.44%.

In the last reported quarter, Nintendo’s adjusted earnings of 96 cents per share beat the Zacks Consensus Estimate of 77 cents and increased 24.7% from the year-ago quarter. Moreover, the company's revenues of $5.39 billion comfortably surpassed the Zacks Consensus Estimate of $4.69 billion and increased 25.6% year over year.

Nintendo Co. Price and EPS Surprise

Nintendo Co. Price and EPS Surprise | Nintendo Co. Quote

For the to-be reported quarter, the consensus mark for revenues is pegged at $1.84 billion. The consensus mark for earnings has remained steady at a loss of 4 cents over the past seven days.

While the revenue estimate indicates an increase of 0.49% from the year-ago quarter reported figure, the estimate for earnings implies a sharp decline of 200%.

Let’s see how things are shaping up for the upcoming announcement.

Factors Likely to Influence Q4 Results

Nintendo’s revenues are expected to benefit from solid game releases on Nintendo Switch and Nintendo 3DS.

The company released the following games in the quarter ending March 2019 — New Super Mario Bros. U Deluxe and Yoshi's Crafted World on Nintendo Switch in the United States, Japan and Europe. Additionally, Nintendo released Fitness Boxing in the United States.

Moreover, Kirby's Extra Epic Yarn was launched on Nintendo 3DS in the United States, Japan and Europe. While Mario & Luigi: Bowser's Inside Story + Bowser Jr.'s Journey was launched in the United States and Europe, Yo-Kai Watch 3 was made available only in the United States.

This apart, higher sales of Switch in the to-be-reported quarter is likely to aid the top line. Notably, Switch was the top-selling platform in the United States in January and February this year, per a report from NPD Group.

Additionally, Switch, the only console platform to record year-over-year sales growth outnumbered Microsoft’s MSFT Xbox One and Sony’s SNE PlayStation 4 sales in January in the United States, per VentureBeat that quoted NPD Group report.

Moreover, Nintendo recorded the highest “hardware dollar sales” since 2011 in February 2019 in the United States, which is likely to drive results of the quarter ending March 2019.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Nintendo has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

A Key Pick

Here’s a stock, which, per our model, has the right combination of elements to deliver an earnings beat this quarter:

SeaWorld Entertainment, Inc. SEAS has an Earnings ESP of +6.45% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.

See 7 breakthrough stocks now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Sony Corporation (SNE) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
SeaWorld Entertainment, Inc. (SEAS) : Free Stock Analysis Report
Nintendo Co. (NTDOY) : Free Stock Analysis Report
To read this article on click here.
Zacks Investment Research