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DJ SoftBank Group Expected to Post Sharp Net Profit Increase -- Earnings Preview

· 02/05/2021 04:11

By Phred Dvorak and Kosaku Narioka

SoftBank Group Corp. is scheduled to report its third-quarter results on Monday. Here's what you need to know:

NET PROFIT FORECAST: SoftBank Group is expected to post a 79% rise in net profit to 98.51 billion yen ($933.3 million) for the quarter ended Dec. 31, according to a poll of analysts by S&P Global Market Intelligence. That compares with Y55.04 billion net profit a year earlier.

REVENUE FORECAST: SoftBank Group's third-quarter revenue is estimated to have dropped 44% from a year earlier to Y1.359 trillion, according to the poll.

WHAT TO WATCH:

--MARKET BONANZA: Public markets have been on a tear in recent months, and SoftBank's investments were big beneficiaries. One example: Vision Fund portfolio company DoorDash Inc. listed in December and had already earned the fund an estimated $8 billion in paper gains by the end of the month. Just how big were SoftBank's overall investment gains in the quarter ended Dec. 31?

--IPO PIPELINE: Companies are rushing to take advantage of the hot markets by going public, and SoftBank's portfolio companies are no exception. Half a dozen or more of the Vision Fund's investees--some of which already have multibillion-dollar valuations--are said to be poised to IPO this year. SoftBank has already rolled out two special-purpose acquisition companies, or SPACs, which list first then find a target to acquire later. More could be in the works. Investors will be watching for any indication of what's in the IPO pipeline and how SoftBank might cash in.

--LOOSE ENDS: Investors will watch to see if SoftBank provides more clarity on a number of loose ends. The company reportedly wound down its big options trades at the end of last year; are those trades over for good and did SoftBank lose money? What is SB Northstar, the asset-management unit run by SoftBank CEO Masayoshi Son, investing in and how much money is it handling? Does SoftBank have further plans yet for the use of its enormous cash pile? It had cash and cash equivalents totaling Y5.015 trillion as of Sept. 30.

Write to Phred Dvorak at phred.dvorak@wsj.com and Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

February 05, 2021 04:11 ET (09:11 GMT)

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