Softbank reports soaring 3Q profit; ups full-year forecast on strong iPhone demand

3 Feb 2011

Japanese telecoms group Softbank Corp today reported a sharp rise in net income for its fiscal third quarter ended 31 December 2010 and raised its profit target for the full year. The group booked net profit of JPY65.46 billion (USD802.2 million) for the period under review, up from JPY24.11 billion a year earlier. Softbank also said it has increased its annual profit forecast for the year ending 31 March 2011 by 20% to JPY600 billion, citing strong demand for iPhone smartphones. The operator, which offers cellular services in the country through its Softbank Mobile arm, is the exclusive provider of Apple Inc’s touch-screen handset. In the October-December period the carrier added 56% of all net new mobile subscriptions in the country, gaining 925,700 new customers. Revenue climbed 13% year-on-year to JPY784.9 billion, while operating profit rose 23%. Softbank noted that the significant spike in profit from a year ago was attributable in part to an asset write-off that impacted on its bottom line in the year-ago quarter.

In the statement, the Tokyo-based carrier said that operating profit (i.e. sales minus the cost of goods sold and administrative expenses) is expected to rise to a record JPY600 billion (USD7.3 billion) for the period, eclipsing the JPY565.5 billion average forecast compiled by Bloomberg in a poll of 22 analysts. The telco’s president Masayoshi Son also said his firm is expanding the company’s smartphone portfolio to include more models running Google’s Android O/S to stave off competition from rivals NTT DoCoMo and KDDI. Softbank’s strategy comes at a good time: according to the MM Research Institute, shipments of handsets that can surf the web, offer audio and video content and run software applications will almost triple to 6.8 million units this fiscal year. Softbank, which reported operating income of JPY465.8 billion in fiscal 2009/10, did not provide net income and revenue forecasts.

Japan, SoftBank Corp, SoftBank Group Corp