Cost cuts lead to first-half Suzuki profit

TOKYO -- Suzuki Motor Corp., Japan's top minivehicle maker, reported on Tuesday a healthy rise in first-half operating profit, helped by aggressive cost-cutting, a weaker yen and a strong performance by its motorcycle division.

Group operating profit for the six months through September climbed 18.5 percent year-on-year to 31.24 billion yen ($253.7 million), in line with an average forecast by four analysts of 30 billion yen.

Japan's fourth-ranked automaker by market capitalization saw its net profit rise 2.3 percent to 11.13 billion yen.

Earnings per share came in at 20.58 yen, compared with 22.25 yen for the same period a year earlier.

Suzuki, always conservative in its forecasts, left its full-year outlook unchanged at a 21 billion yen net profit, a 3.7 percent rise from the previous year.

Its overall vehicle sales projection for the full year was also unchanged at 922,000 units.

Suzuki is 20 percent owned by General Motors.

Analysts said they were impressed by the performance of the company's motorcycle division.

"Importantly for the long-term profitability of the company, we saw an increase in motorcycle profitability (on an operating basis) from 6.6 billion yen to 12.1 billion yen year-on-year, quite a significant improvement," said Stephen Usher, auto analyst at JP Morgan.

The announcement came shortly before the close of trade. Shares in Suzuki ended the day down 0.8 percent at 1,238 yen, while the benchmark Nikkei average shed 1.42 percent.

As with other Japanese automakers, Suzuki's stock price lost ground after the Sept. 11 attacks in the United States. It is 12.5 percent shy of a the pre-attack level of 1,415, and well below its year high of 1,703.

Suzuki has less exposure to the U.S. market than many of its Japanese rivals, but analysts say concerns over the domestic minivehicle market have weighed on its stock price.

Minivehicles, which have a maximum engine displacement of 660cc, account for roughly one-third of domestic auto sales, benefiting from tax breaks and looser restrictions on parking in rural areas.

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