Softbank logs unexpected loss in Q1, announces $3.4 bln buyback

Investing.com-- SoftBank Group Corp. (TYO:9984) clocked an unexpected loss in the June quarter despite increased technology valuations on optimism over artificial intelligence, although the company still announced a 500 billion yen ($3.4 billion) share buyback. 

The tech investment giant clocked a net loss attributable to owners of 174.28 billion yen, compared to a loss of 477.62 billion yen last year. The figure missed Bloomberg forecasts for a small profit of 1.05 billion yen. 

Net sales grew 9.3% to 1.70 trillion yen, while the firm marked a 559.7 billion yen investment gain in the quarter, compared to a 699.0 billion yen loss last year. 

But despite breaking two straight quarters of profits, Softbank (OTC:SFTBY) declared a share repurchase program of 500 billion yen. 

The buyback comes amid growing investor pressure on the tech giant to buy back its shares, which were trading at a significant discount to the total value of the firm’s holdings. 

Softbank’s Vision Funds, through which it makes most of its tech investments, marked a gain on investments of 1.91 billion yen, down from the 159.77 billion yen seen last year. 

But while the investment giant benefited from high-flying tech valuations in the June quarter, it grappled with increased market volatility in the past month, as questions over AI’s potential, an unwinding carry trade and fears of a U.S. recession battered equity valuations across the board. 

British chip designer Arm Holdings (NASDAQ:ARM), which is Softbank’s biggest holding, slumped 38.6% in the past month on doubts over AI demand, while the firm also clocked presented a disappointing outlook for the current quarter.

Still, Softbank CEO Masayoshi Son has presented a largely bullish outlook on AI, and has flagged plans for Softbank to explore multiple ventures in the sector, including developing its own generative AI.