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Capcom Rises as Social Games Drive Surge in Profit: Tokyo Mover

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Capcom Rises as Social Games Drive Surge in Profit
Earnings at Capcom and rivals including Namco Bandai Holdings Inc. are getting a boost from the popularity of games on Japanese online social networks operated by Gree Inc., DeNa Co. and Mixi Inc. Photographer: Kimimasa Mayama/Bloomberg

July 31 (Bloomberg) -- Capcom Co., a Japanese video-game maker, rose the most in eight weeks in Tokyo trading after reporting first-quarter profit that beat analyst estimates.

The maker of the Monster Hunter Card Muster social-network game jumped 6.5 percent, the biggest gain since June 5, to 1,599 yen as of the close of trading in Tokyo. Operating profit, or sales minus the cost of goods sold and administrative expenses, more than tripled to 2.7 billion yen in the three months ended June 30, Capcom said after the market’s close yesterday. That compares with the 1.8 billion yen average of four analyst estimates compiled by Bloomberg.

Domestic social-network services games’ “strong contribution was the biggest reason for the good results,” Nanako Imazu and Christian Dinwoodie, analysts at CLSA Asia-Pacific Markets in Tokyo, wrote in a note yesterday. They maintained a buy rating on shares of the Osaka-based company and have a 12-month price estimate of 1,900 yen.

Earnings at Capcom and rivals including Namco Bandai Holdings Inc. are getting a boost from the popularity of games on Japanese online social networks operated by Gree Inc., DeNa Co. and Mixi Inc. Shares of Namco Bandai rose to the highest in three months today after the Nikkei newspaper reported a gain in operating profit that beat some analyst estimates.

Operating profit probably rose to 15 billion yen in the three months ended June 30, after Namco Bandai increased the number of social games, the Nikkei reported, without saying where it got the information. That compares with profit of 6.3 billion yen reported a year earlier, and the 8.9 billion yen average of four analyst estimates compiled by Bloomberg.

Namco Bandai climbed 3 percent to 1,127 yen, the highest since May 2 on a closing basis.

To contact the reporter on this story: Dave McCombs in Tokyo at dmccombs@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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