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Namco Cuts Year Profit Outlook
Namco Ltd has announced it had cut the group net profit estimate for the current year to next March due to concern over slowing U.S. sales after the September 11 attacks on New York and Washington.
The group net profit estimate for the year to next March 31 was reduced to 1.9 billion yen ($15.79 million) from 2.6 billion yen, but the company raised its first-half earnings estimate after solid sales of consumer games in North America.
The sales forecast for the full year was reduced by 2.6 percent to 151 billion yen. "We decided to lower sales and profit estimates for this year after factoring in a decline in consumer software sales in the United States due to the attacks as well as sluggish domestic consumption," a company spokeswoman said.
Some analysts warned the attacks on the World Trade Center and Pentagon would chill consumer sentiment in North America, weighing on game makers' sales in the critical Christmas period. For the six months to September, Namco now expects group net profit of 950 million yen, against its previous forecast of a net loss of 500 million yen.
Stronger-than-expected demand in North America for its software for home videogame consoles such as Sony Corp's PlayStation 2, as well as robust sales of its new game "Ace Combat 04" which hit the shelves in Japan last month boosted the bottom-line profit for the six months, the spokeswoman said.
Namco generated nearly 20 percent of sales in North America in the 2000/01 business year. The performance of the consumer software business offset a 400 million yen appraisal loss on its shareholdings, she added.
Namco, which is also one of the top arcade game centre operators, saw an improvement in the arcade business in Japan after closing loss-making centres, but its U.S. operations remained unhealthy, she said. "We will speed up restructuring steps in North America, including closures of loss-making centres and the implementation of better service," she said.
SOURCE: Reuters.
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