SoftBank Q1 profit beats estimate

BloombergTOKYO (Bloomberg) — SoftBank Group Corp. reported a first-quarter profit that beat the highest analyst estimate thanks to valuation gains from Vision Fund investments such as Slack Technologies Inc.

Operating income in the three months ended June slipped 3.7 percent to ¥688.8 billion, the Tokyo-based company said Wednesday. That’s more than the ¥345.3 billion average of analyst estimates compiled by Bloomberg.

Masayoshi Son has been remaking SoftBank from primarily a telecommunications operator into a technology investment firm, and his $100 billion Vision Fund has emerged as a major contributor to earnings. The pending sale of SoftBank’s U.S. wireless unit Sprint Corp. to T-Mobile USA Inc. would accelerate the transition. Last month, Son announced that he aims to raise a total of $108 billion for a second enormous fund.

“The Vision Fund has become a major contributor to profit, but it’s also difficult to predict on quarterly basis,” Anthea Lai, a Bloomberg Intelligence analyst, said ahead of the release. “Even more than the earnings themselves, investors will be looking to hear what Son has to say at the briefing. There is a lot of interest in Vision Fund 2.”

The Vision Fund and SoftBank’s own Delta Fund contributed ¥397.6 billion to profit in the quarter, accounting for more than half of the total. SoftBank booked valuation gains on its stakes in Slack, which went public in June, Indian hotel chain OYO Rooms and food-delivery app DoorDash Inc. The gains were offset by a ¥195.3 billion decline in the fair value of holdings including Uber Technologies Inc. Additional investments in the quarter totaled $6.2 billion.Speech

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