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SoftBank eyes earnings recovery in third quarter amid surge in IPOs

The Japanese conglomerate is reportedly expecting a net profit for the quarter to December of around US$1.63bn, up from US$521.7mln a year ago

Uber Technologies Inc - SoftBank eyes earnings recovery in third quarter amid surge in IPOs

SoftBank Group Corp is expected to see further recovery in its earnings when it delivers its third quarter results on Monday as a rally of tech shares in its portfolio and a fertile environment for initial public offerings (IPOs).

A Reuters report on Thursday said the Japanese conglomerate is expected to report a net profit for the quarter to December of around 171bn Japanese yen (US$1.63bn), according to analyst estimates, up from around 55bn yen (US$521.7mln) a year ago when the company suffered heavy losses on several investments including office sharing company WeWork through its Vision Fund.

However, since then the company has been bolstered by a rally in various tech shares in its portfolio such as Uber Technologies Inc (NYSE:UBER), while other firms backed by its Vision Fund such as food delivery app DoorDash Inc (NYSE:DASH) and Tokyo-listed property sale platform Open Door Inc went public to much fanfare in December.

SoftBank is also expected to make use of special purpose investment companies (SPACs) to raise additional cash, while investors may also be eyeing the performance of the company’s new trading unit SB Northstar, which uses the company’s cash to buy public stocks.

The company will also be looking to continue its diversification away from its most successful investment, Chinese ecommerce giant Alibaba Group Holding Ltd (NYSE:BABA), after shares in the company took a hit last year as Chinese regulators blocked the IPO of its affiliate financial tech business Ant Group.

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