Mazda, Nintendo profits surprise in Japan


Mark Fields is leading a revamp that has already seen Mazda bounce from heavy red ink into the black

Alex Frew McMillan
CNN Hong Kong

TOKYO, Japan (CNN) -- Two of Japan's industry leaders, Mazda Motor Co. and Nintendo Co., came out with profit upgrades on Thursday.

The upbeat earnings predictions come one day after Japan's Cabinet Office said it was more positive on Japan's economy as a whole.

Experts have for some time noted small signs that Japan, second only to the United States in national economic might, may have bottomed. But they say the signs are inconclusive and they are awaiting more evidence.

They got it on Thursday, with Mazda Motor revising its forecasts up 554 percent for the business year just ended in March.

Weak yen mainly the reason

Japan's No. 5 car company now expects to make 8.5 billion yen ($65 million), well up from the prior forecast of a 1.3 billion yen profit. The company said the weak yen, which still hovers above 130 to the U.S. dollar, boosted its figures.

A cost-cutting program directed by Mazda President Mark Fields, in conjunction with 33 percent owner Ford, also helped the figures. But Mazda only revised sales slightly upward, to 2.094 trillion yen from 2.090 trillion yen.

The company said it expects to sell slightly fewer actual cars, with 2,000 fewer in its global total of 948,000 through March 31.

Mazda Motor stock is up 4.5 percent at 350 yen at the lunch break in Tokyo.

Stock in game maker Nintendo is suffering the opposite fate. It is down 0.81 percent at 19,530 yen at the same time on the Osaka stock exchange.

Nintendo cashes in on currency

But Nintendo also said the weak yen, trading at 131.38 to the greenback on Thursday, has helped its bottom line.

Nintendo said its group net profit rose to 110 billion yen ($837 million), up 37.5 percent from its earlier forecast of a profit of 80 billion yen.

But a spokesman said that, excluding the effect of the yen, the figures were in line with the forecast. A weak yen boosts the profits of big exporters by not only making Japanese products cheaper overseas but also increasing U.S. dollar sales when sent back to Japan.

Microsoft's XBox machine, a competitor to Nintendo's GameCube and Sony's PlayStation 2, has shown slow sales in the first two months on the Japanese market. It is more expensive than Nintendo's offering.

The broad Topix index of all stocks on Tokyo's First Section is down 0.3 percent at 1,074.81, however.

The better-known Nikkei index, which is more technology-driven, was showing gains but fell by the noon break, down 0.17 percent to 11,199.70.