• Some companies are getting an unexpected lift from billions of dollars in returned US tariffs.
• Nintendo recorded a $300 million tariff refund.
• The refunds are lifting profits and margins, but analysts warn the benefits are unlikely to last.

An unusual boost is showing up in some corporate earnings this summer: tariff refunds.

Nintendo became the latest beneficiary of the boost on Thursday, reporting net profit of 147.4 billion Japanese yen, or $931 million, for the quarter ending June, up 54% from a year earlier and handily beating analyst expectations of 77.8 billion yen. Revenue fell about 10% to 517.8 billion yen, but still came in above expectations.

Tariff refunds were a major contributor: The Kyoto-based maker of the Switch 2 said it recorded a $300 million tariff refund that had previously been recorded as cost of sales.

Strong software sales, led by the video games Tomodachi Life: Living the Dream and Pokémon Pokopia, also helped lift margins.

Shares of Nintendo closed 5% higher on Friday following the results. They are 24% lower this year.

In its presentation, Nintendo said the tariffs related to the refunds "were primarily borne by the company rather than passed on to consumers through product prices."

Nintendo has not said how it plans to use the refunds. The company did not immediately respond to a request for comment from Business Insider.

Nintendo is fighting a class-action lawsuit over the tariff refunds.

Two US customers sued the company in April, arguing that Nintendo could effectively recover its tariff costs twice — first through higher prices that they allege were passed on to consumers, and again through refunds from the US government.

Nintendo moved to dismiss the case in July, arguing that customers "received exactly what they bargained and paid for" and have no legal right to a rebate simply because the tariffs were later struck down.

An earnings season of tariff refunds

Nintendo's tariff windfall is part of a broader earnings-season trend, with companies from Apple to Amazon to Siemens Healthineers recently disclosing sizable tariff refunds or related earnings benefits.

Companies are taking different approaches to the windfall.

Apple said tariff refunds added about two percentage points to its June-quarter gross margin and 11 cents to diluted earnings per share. CEO Tim Cook has said the company will reinvest the refunds in additional US innovation and advanced manufacturing.

Amazon said it received about $600 million in tariff refunds in the second quarter and plans to reimburse customers in limited cases where it can determine they directly bore the tariff cost.

Siemens Healthineers also got a sizable boost. Tariff refunds helped lift the German medical-technology company's adjusted operating margin to 19.1% from the 16.8% a year ago and contributed to a 16% rise in adjusted operating profit to 1.1 billion euros. The company also raised its full-year earnings-per-share forecast to reflect the refunds.

Elsewhere, Walmart has said it expects to return its anticipated refunds to consumers through price reductions, while McCormick and Campbell's have said they will use proceeds to offset higher costs.

The repayments follow a February 20 Supreme Court ruling that the International Emergency Economic Powers Act did not authorize the president to impose the tariffs. The US Court of International Trade has overseen the process of returning the duties to importers.

About $166 billion was collected under the invalidated tariffs, with roughly $100 billion in refunds processed by early August, official filings show.

Analysts caution that the refunds offer just a one-time boost to earnings.

"Most tariff proceeds will fail to sustain profitability as companies prioritize competitive prices and mitigating costs," wrote analysts at S&P Global in a report last month.

• Meta was ordered to pay a total of $942 million over harm caused to children on its platforms.
• A New Mexico judge on Thursday ordered Meta to pay $567 million, mostly for treatment services.
• A jury previously found the company liable and approved a fine of $375 million.

Meta must pay a total of $942 million to address harm caused to children on its platforms, a New Mexico judge ruled Thursday.

A jury in March found Meta liable for failing to protect kids and approved a $375 million fine. New Mexico state Judge Bryan Biedscheid issued a ruling Thursday ordering the company to pay an additional $567 million and to make changes to its platforms to make them safer for kids. The judge said the money was to be put into an abatement fund, with most of it, $420 million, to go toward treatment services.

Among the changes, Meta must strengthen age verification in New Mexico, limit users under 18 in the state to a combined 90 hours a month on Facebook and Instagram, turn off most push notifications for minors overnight and during school hours, and hide "like" counts by default unless a parent or guardian allows them to be shown.

"This case has always been about protecting children, standing up for families, and making sure that one of the world's largest technology companies cannot profit from practices that endanger young people without consequence," New Mexico Attorney General Raul Torrez said in a statement following the ruling. "Today's decision is a victory for every parent who has worried about what social media is doing to their child and every child who deserves to grow up safer online."

In a separate statement, Torrez called the ruling a "blueprint" for holding social media companies liable for products that endanger children.

"Now other states, and other countries confronting the same crisis, have a roadmap they can follow," Torrez said.

Meta said it disagrees with the ruling and will appeal.

"We work hard to keep people safe on our platforms and have been transparent about the challenges of identifying and removing bad actors and harmful content," a Meta spokesperson said in a statement to Business Insider. "We remain confident in our record of protecting teens online and will continue to defend ourselves against claims that misrepresent the facts."

• Hiring has slowed, but firms are getting better at matching workers to jobs, according to Goldman Sachs.
• The economists found that fewer early job exits suggest both sides finding better matches.
• Tools like LinkedIn and AI may help firms avoid bad hires, reducing churn in the labor market.

Hiring has slowed sharply across many advanced economies, but companies may simply be getting better at picking the right people, according to Goldman Sachs.

That's due in part to a decline in short-term job separations: workers leaving or losing jobs soon after being hired. That decrease suggests firms and workers are increasingly finding better matches from the start, even as labor markets cool after the post-pandemic hiring surge.

"Most of the pullback in churn reflects a decline in job separations within one or two quarters after hiring, a pattern that suggests that workers and firms have gotten better at identifying 'good' matches over time," Goldman's economists wrote in a Tuesday note.

Historically, short-term separations have been common because some hires turn out to be poor matches between employers and workers. However, they have steadily fallen across developed economies over the past two decades, and the decline accelerated after the pandemic.

The trend is borne out by US Census Bureau data and Canadian labor force data.

Fewer bad hires

The decline appears broad across industries. It's explained by changes in the workforce composition, suggesting a structural shift in how workers and firms form job matches.

"In our opinion, the best explanation of the decline in short-term separations is that increased information and improved screening processes have increased both firms' and workers' ability to identify 'good' matches," wrote the Goldman economists.

Platforms such as LinkedIn, Glassdoor, and Indeed give workers insight into company culture and working conditions before they accept a role. At the same time, employers are increasingly using digital screening tools — including AI — to evaluate candidates and screen applicants.

Those tools may help reduce hiring mistakes, the economists wrote.

Better matches mean fewer early job exits — and less need for companies to hire replacements.

The shift could also make the labor market more efficient overall. With fewer failed job matches, there is less frictional unemployment — the type of joblessness that occurs when workers move between jobs.

Goldman's analysis comes amid debate about the current labor market, which some economists describe as a "low hiring, low firing" environment.

In such an environment, a further drop in hiring could push unemployment higher more quickly because displaced and younger workers have fewer opportunities.