Softbank Corp reports 13% drop in profits in Q4

8 May 2008

Japanese telecoms and internet service provider Softbank Corp reported a 13% fall in quarterly operating profit for its fiscal fourth-quarter ending 31 March, as higher-than-expected marketing costs to sign up new users impacted heavily on its bottom line. Softbank’s operating profit was JPY64.1 billion (USD614.6 million) in the three months to 31 March 2008, down from JPY73.8 billion a year earlier, and well below an average forecast of JPY89.7 billion in a poll compiled by Reuters Estimates. Japan’s third largest mobile carrier by subscribers – after NTT DoCoMo and KDDI Corp – has also announced plans to seek shareholder approval for a potential preferred share issue to attract investors who want higher dividends but no voting rights. Despite the worse-than-expected financial performance Softbank predicts its mobile business will push up net income in the current financial year. However, some analysts say Softbank faces a crucial time in the coming autumn when customers on a two-year discount plan come to the end of their contracts.

Japan, SoftBank Group Corp