Capcom Forecast Revisions for Year Ending March 31, 2011

Key insights

6 takeaways

01
Capcom lowered its full-year net sales forecast to 91 billion yen and net income to 6.5 billion yen due to unfavorable foreign exchange rates.See it on page 9
02
First-half net income was revised downward by 41.4% to 1.7 billion yen, while net sales fell 10.6% to 40.5 billion yen.See it on page 5
03
The delay of the major title Dead Rising 2 shifted shipments out of the first half, contributing to the initial financial shortfall.See it on page 7
04
Currency volatility significantly impacts profitability, with every one-yen appreciation against the U.S. dollar reducing annual operating income by approximately 150 million yen.See it on page 10
05
A one-yen appreciation against the Euro results in an additional 50 million yen impact on annual operating income.See it on page 10
06
Despite financial revisions, Capcom maintained its original sales volume projections for major software titles, indicating that core operational strategies remain unchanged.See it on page 2

Summary

Capcom issued a downward revision of its financial forecasts for the fiscal year ending March 31, 2011, citing significant headwinds in the global economic environment and specific product release timing. The primary objective of this disclosure is to update investors on anticipated shortfalls in net sales, operating income, and net income for both the first half and the full fiscal year.

For the first half of the fiscal year, net sales were adjusted downward by 10.6% to 40.5 billion yen, while net income was reduced by 41.4% to 1.7 billion yen. These results were driven by the appreciation of the Japanese yen and a delay in the release of the major title Dead Rising 2, which shifted shipments out of the first-half reporting period. While the Consumer Online Games segment experienced a shortfall, the Arcade Operations and Amusement Equipment segments performed better than initially projected.

For the full fiscal year, the company lowered its net sales forecast to 91 billion yen and net income to 6.5 billion yen. This adjustment is largely attributed to a revision of assumed foreign exchange rates, specifically the strengthening of the yen against the U.S. dollar and the Euro. The company estimates that every one-yen appreciation against the dollar impacts annual operating income by approximately 150 million yen, with an additional 50 million yen impact per yen against the Euro. Despite these financial adjustments, the company maintains its original sales volume projections for major software titles, suggesting that the core operational strategy remains intact despite external currency volatility.