SoftBank Reports Q1 Earnings Beat, Bouncing Back From Record Losses

SoftBank Group Corp SFTBY posted $12 billion in first-quarter profit Monday, compared with a loss of nearly $13 billion in the same period a year ago.

Results Beat Expectations:  This was 71.4% above the $7 billion S&P Global Market Intelligence had forecasted, Financial Times reported.

Profit for the Masayoshi Son-led rose as the group shed its stake in the combined entity that emerged out of the merger between its U.S. subsidiary Sprint and T-Mobile US Inc TMUS.

Vision Fund Drives Profits: The company’s Vision Fund, which invests in trendy technology startups, reported an income of $1.2 billion. This compared with the $10.6 billion loss posted in the similar quarter last year. 

The fund’s investment gains in Q1 stood at $2.8 billion, largely on the back of its investments in Uber Technologies Inc UBER  and Slack Technologies Inc WORK.

In the previous quarter, the fund’s losses were driven by beleaguered investments such as WeWork and Uber leading up to groups first operating loss in 14 years.

What's Next: Jefferies Group analyst Atul Goyal thinks the success of the Vision Fund could foster further endeavors along similar lines. “With so much money sloshing around in the global financial markets, the idea of successive Vision Funds could be back on the table,” he said, as reported by Bloomberg.

Price Action: SoftBank shares closed 2.45% lower at $59.95 in Tokyo on Tuesday. The company’s OTC shares closed 0.92% higher at $30.73 on Monday. 

Photo courtesy: nobihaya on Wikimedia