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SoftBank's Q2 profit sees 9% rise, beats estimates

The telco maintained its full year operating profit forecast at 890 billion yen.

twitter-logo Reuters   TOKYO     Last Updated: November 5, 2019  | 13:24 IST
SoftBank's Q2 profit sees 9% rise, beats estimates
(Photo: Reuters)

Japanese telco SoftBank Corp (9434.T) reported on Tuesday a 9% rise in second-quarter operating profit, beating estimates, buoyed by its mobile business.

Operating profit in the July-September quarter was 283 billion yen ($2.60 billion). That compared with an average forecast of 266 billion yen from four analyst estimates compiled by Refinitiv.

SoftBank Corp's results are closely watched by investors not only as it is Japan's third largest telco and has committed to pay out 85% of its profits as dividends, but as an indicator of the health of parent SoftBank Group Corp (9984.T), which has a 67% stake.

The telco maintained its full year operating profit forecast at 890 billion yen.

SoftBank Group, which reports its earnings on Wednesday, is trying to raise funds for a second technology fund but is widely expected to report large writedowns on some of the big tech bets it and its $100 billion Vision Fund have made.

SoftBank Corp's results follow those of rivals NTT Docomo (9437.T) and KDDI Corp (9433.T), which last week reported that profits fell 13% and rose 9%, respectively.

Price pressure on Japan's big three telcos has been relieved by delays in the roll-out by Rakuten Inc (4755.T) of its own mobile network, which has been hit by base station construction delays, with the company yet to announce a concrete commercial service launch date. Rakuten reports its earnings on Thursday.

As e-commerce firm Rakuten expands into mobile, SoftBank is pushing further into retail, cementing its grip over Z Holdings Corp (4689.T), formerly Yahoo Japan, which in turn has agreed to acquire fashion e-tailer Zozo Inc (3092.T).

Zozo will begin selling its wares on the new PayPay Mall, a major advance into online retailing by SoftBank, which also operates QR code payments app PayPay - one of a huge number of such services jostling for consumer attention as Japan belatedly shifts to cashless payments.

In support of that push, SoftBank's baseball team, SoftBank Hawks - which last month topped its league for the third straight season - will change the name of its stadium in Fukuoka to PayPay Dome from Yahuoku Dome.

SoftBank Corp shares closed flat at 1,499 yen ahead of the results, close to the 1,500 yen IPO price from last December when the telco had Japan's largest ever listing.

Also read: How SoftBank made WeWork an offer it couldn't refuse

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