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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  Rakuten, Inc.    4755   JP3967200001

RAKUTEN, INC.

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Rakuten quarterly profit almost wiped out as investment weighs, Lyft stake slides

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11/07/2019 | 04:18am EST

Rakuten Inc's quarterly operating profit was almost wiped out in the three months ended September as investment in its e-commerce and mobile units weighed on profits, with the value of its bet on ride-hailing firm Lyft also sliding further.

Rakuten's billionaire founder and Chief Executive Hiroshi Mikitani is under pressure on multiple fronts as a slide in his tech bets compounds pain from squeezed margins at the firm's e-commerce business and a delay to its mobile market entry.

The Japanese firm booked a 103 billion yen ($945 million) writedown on its 11% stake in Lyft Inc, as bets on the ride-hailing industry by Rakuten and its rival SoftBank Group Corp, the largest shareholder in Uber Technologies, sour amid a market sell-off of money-losing startups.

Mikitani defended Lyft as an "excellent investment" at a news conference, saying it was making a return for Rakuten.

Rakuten has started its own mobile business, saying it has radically cut the cost of building its network by using cloud-based software rather than expensive hardware.

But construction delays led to an embarrassing climbdown in September when Rakuten said it would offer free services to just 5,000 customers, with no concrete revised date for the launch, which had been due to take place in October.

Rakuten would have 3,000 base stations built by year-end with "coverage improving dramatically," the mobile unit's Chief Technology Officer Tareq Amin said.

Rakuten's mobile network delay relieves potential downward price pressure on its bigger telco rivals NTT Docomo, KDDI and SoftBank Corp.

Rakuten's operating profit came in at 1.1 billion yen in the third quarter, versus a profit of 43.9 billion yen a year earlier. That was better than an average forecast for an operating loss of 2.5 billion yen from three analysts polled by Refinitiv.

Its shares closed up 2% ahead of earnings, compared with a 0.1% rise in the benchmark index <.N225>. Rakuten's shares are up 45% this year but have lost almost 20% since June.

(Reporting by Sam Nussey; Editing by Himani Sarkar and Edmund Blair)

By Sam Nussey

Stocks mentioned in the article
ChangeLast1st jan.
KDDI CORPORATION 0.47% 3425 End-of-day quote.0.00%
LYFT, INC. -1.69% 44.7 Delayed Quote.3.91%
NIPPON TELEGRAPH AND TELEPHONE CORPORATION 1.28% 2811.5 End-of-day quote.0.95%
NTT DOCOMO, INC. 0.45% 3145 End-of-day quote.-0.47%
RAKUTEN, INC. 4.11% 987 End-of-day quote.3.89%
SOFTBANK CORP 1.21% 1502.5 End-of-day quote.0.84%
SOFTBANK GROUP CORP. 2.40% 5664 End-of-day quote.1.23%
UBER TECHNOLOGIES, INC. -0.49% 40.72 Delayed Quote.36.92%
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Financials (JPY)
Sales 2020 1 418 B
EBIT 2020 25 658 M
Net income 2020 16 624 M
Debt 2020 343 B
Yield 2020 0,45%
P/E ratio 2020 83,2x
P/E ratio 2021 29,1x
EV / Sales2020 1,19x
EV / Sales2021 0,97x
Capitalization 1 339 B
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Technical analysis trends RAKUTEN, INC.
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Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 17
Average target price 1 236,24  JPY
Last Close Price 987,00  JPY
Spread / Highest target 184%
Spread / Average Target 25,3%
Spread / Lowest Target -15,9%
EPS Revisions
Managers
NameTitle
Hiroshi Mikitani Chairman, President & Chief Executive Officer
Kentaro Hyakuno Chief Operating Officer & Group Executive VP
Kenji Hirose Chief Financial Officer & Executive Vice President
Yasufumi Hirai Chief Information & Information Security Officer
Terje Marthinussen Chief Technology Officer
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