April 4 (Bloomberg) -- Nintendo Co., the world's biggest maker of handheld video-game players, said annual profit rose to a four-year high and announced a record dividend after gains in the dollar increased the value of overseas assets and earnings.

Net income climbed 8.7 percent to 95 billion yen ($808 million) in the year ending March 31, the company said in a preliminary earnings statement. That compares with its earlier forecast for profit of 75 billion yen. The Kyoto-based company booked a 45 billion yen gain on currency fluctuations, spokesman Yasuhiro Minagawa said.

Nintendo, which earns about 75 percent of sales outside of Japan, holds foreign currency assets of about $3.5 billion and 1.1 billion euros. The company also said sales of its DS handheld game player, which includes touch-screen controls, were strong in Japan and it had to make up for a shortage by selling units intended for export.

Nintendo said it would pay a 370 yen per share dividend, after previously planning to pay a full year dividend of at least 140 yen. It paid out 270 yen in fiscal 2004. The company's shares rose 1.9 percent to close at 17,770 yen today on the Osaka Securities Exchange, after declining earlier in the day.

Full-year revenue fell 3 percent to about 500 billion yen, in line with the company's earlier estimate, today's statement showed. Operating profit, or sales minus the cost of goods sold and administrative expenses, fell 19 percent to about 90 billion yen, the report showed.

Exchange Rates

The company used an exchange rate of 117.47 yen to the dollar and 142.81 yen to the euro for today's earnings statement. In January, the company had forecast a rate of 110 yen to the dollar and 135 yen to the euro.

Nintendo's full-year net income is the highest since its 106 billion yen profit in fiscal 2001. The company will report final earnings on May 25.

Profit in the quarter ended March 31 fell about 86 percent to 2.82 billion yen, and sales declined about 8.6 percent to 87.7 billion yen, based on subtracting April to December results from the full-year earnings announced today. Company spokesman Minagawa declined to comment on or confirm fourth-quarter figures.

The company said as of February it had sold more than 6 million DS units in Japan since the launch in December 2004, and targets 10 million units by year-end, as it introduces a thinner and lighter model called the DS Lite and adds features such as a Web browser and digital TV tuner.

To contact the reporter on this story: Daisuke Takato in Tokyo at dtakato@bloomberg.net

Last Updated: April 4, 2006 04:09 EDT