Nintendo set to buy back more than $900 million in shares following profit dip

The Switch's sales have put the company in a strong position with cash to use.

Image via Nintendo

Following its financial report for the quarter that ended on June 30, Nintendo announced that it’s buying back more than $900 million in its own shares after seeing a dip in operating profit. 

The company wants to “take advantage of favorable cash position” that has been generated through record sales for the Nintendo Switch to buy back up to 1.8 million shares and cancel them out of its current stock offerings. 

This move equates to Nintendo buying back and removing 1.51 percent of the total number of shares issued for the company, which will take place between Aug. 5 and Sept. 15 via the Tokyo Stock Exchange. All of this will see the company positioning itself to continue pursuing sustainable growth and “increasing corporate value” following an extended period of strong sales. 

Through the last quarter, Nintendo experienced a 22-percent dip in operating profit to $4.5 billion and a 29.2-percent overall dip in net profit. Despite this post-COVID-19 pandemic drop and continued semiconductor shortage problems, the Switch has surpassed 89 million units sold and software for the system continues to sell well, leading to maintained success across the board. 

“Effective use of cash continues to be an important management tool,” Nintendo said. “We have a strong cash position thanks to the Nintendo Switch business exceeding our own expectations and as a result have fortuitously gained a renewed opportunity to consider how to most effectively invest our cash in a variety of strategic and meaningful ways.”

Nintendo plans to execute all of this by Sept. 16 and hopes that upcoming software releases and the Switch’s new OLED model that’s launching on Oct. 8 will revitalize the company’s numbers heading into the holiday season.