Japanese videogame maker Nintendo made its first annual operating profit in four years, which beat its forecast as well as the market’s.
Operating profit was 24.8bn yen ($207m; £136m) for the year to March, compared with its forecast of 20bn yen and analyst predictions of 23.8bn yen.
The firm said lower costs had offset the impact of slowing revenue growth.
Nintendo was also optimistic about its outlook, expecting its annual operating profit to double in the next year.
It expects to make 50bn yen in the year to March 2016, compared with market forecasts 39bn yen.
Meanwhile, Nintendo’s sales for the fiscal year fell nearly 4% to 549.8bn yen.
Analysts said its plans to enter the smartphone market will make up for the weak sales of its traditional video game consoles.
The boom in mobile games has led to a decline in Nintendo’s customers, while its latest Wii U console is third in the market behind Sony’s PlayStation and Microsoft’s XBox.
In March, Nintendo, the maker of pioneering games like Super Mario, announced a partnership with Japanese developer DeNA to create and operate mobile game apps.
“A new source of revenue is expected from a gaming application for smart devices which will be released this year,” Nintendo said in a statement on Thursday.
The company also plans to release new game titles to boost sales of its Wii consoles, which it expects to be flat at 3.4 million units this year.