By Jason Chau

Shares of Rakuten Group posted their largest single-day decline in two years, after the Japanese conglomerate delivered disappointing quarterly earnings.

Rakuten's stock closed 14% lower in Tokyo on Wednesday, its sharpest fall since August 2024, after trading resumed following a public holiday.

The Tokyo-based company on Monday reported a more-than 11% rise in quarterly revenue and a return to profitability, but its operating profit was sharply below expectations.

Rakuten's quarterly operating profit came in at 20.05 billion yen, equivalent to $125.9 million, for the three months ended June, sharply below the consensus analyst estimate of 39.85 billion yen in a poll by LSEG.

Rakuten, whose businesses span the e-commerce, telecommunications and fintech sectors, said in its financial report that it is closely monitoring geopolitical uncertainties and financial market volatility.

Despite the selloff, Morningstar maintains a positive outlook on the company.

Morningstar analyst Pujance Chan said its fintech segment remains a key driver of revenue and income, with long-term growth underpinned by growing synergies between its banking and securities businesses and its e-commerce and mobile operations.

Favorable market conditions, including higher interest rates and an active Japanese equities market, are also expected to support growth prospects, she said.

Meanwhile, its mobile business is also expected to continue to attract new customers at a steady pace as it reduces its reliance on costly roaming services, driving top-line growth, Chan added.

Amid the global artificial-intelligence boom, the company said it is shifting its focus toward integrating AI across its various services, with a restructuring of its fintech segment aimed at accelerating AI adoption set to take effect in October.

Write to Jason Chau at jason.chau@wsj.com

(END) Dow Jones Newswires

August 12, 2026 04:31 ET (08:31 GMT)

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