SoftBank Plans $3.5 Billion Buyback After Surprise Quarterly Loss

By Megumi Fujikawa

TOKYO--Japanese technology investor SoftBank Group said it plans to buy back up to about $3.5 billion of its shares--an encouraging sign for the Tokyo stock market, which recently suffered its worst day in decades.

SoftBank Group said Wednesday that it will buy back up to 6.8% of shares available, valued at up to 500 billion yen, or $3.46 billion, over the next 12 months.

The announcement is likely to help lift sentiment in the Japanese stock market after the Nikkei Stock Average on Monday suffered its biggest single-day percentage drop since 1987. Share buybacks can benefit investors by boosting a company's per-share earnings.

SoftBank's own share price has fallen by about one-third from its peak in July.

The company on Wednesday also reported a surprise first-quarter loss after two consecutive quarters of profits.

It booked a net loss of Y174.28 billion for the quarter ended June, narrowing from Y477.62 billion a year earlier but missing a modest profit expected by analysts.

The Vision Funds segment posted a business loss of Y204.3 billion for the period, compared with a Y61.04 billion profit in the year-earlier period.

After years of playing a defensive strategy, Chief Executive Masayoshi Son has said the company would look for investment opportunities more actively in the field of artificial intelligence.

But the outlook remains uncertain due to the recent global stock market turmoil, which has hit the technology sector especially hard.

Shares of U.K. chip designer Arm, SoftBank's subsidiary which Son has been focusing on, has dropped nearly 40% from its July peak. Last week, the company left its full-year revenue forecast unchanged despite reporting robust revenue for the first quarter.

Write to Megumi Fujikawa at megumi.fujikawa@wsj.com

(END) Dow Jones Newswires

August 07, 2024 04:13 ET (08:13 GMT)

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