Rare role reversal in Japan’s brutal earnings season

TOKYO -- Who could have guessed the stunning role reversal pulled off by Mitsubishi Motors Corp. during this brutal Japanese earnings season?

Mitsubishi, in recent years the earnings weakling among its domestic peers, was used to sometimes having its earnings results go in the opposite direction from the rest of the pack.

But Mitsubishi’s earnings often were going down while the others’ went up. Not this time.

Earnings at Mitsubishi’s rivals are getting clobbered as a result of Japan’s mammoth earthquake in March. Of the major players reporting so far, if they didn’t tumble to a loss in the April-June quarter, their operating profits plunged. (Nissan fared best -- booking only a 10 percent decline.)

And Mitsubishi? It swung to net and operating profits in the period, compared with losses a year earlier. And it achieved the coup on the back of expanding, not shrinking, sales.

Mitsubishi’s good fortune is due in large part to a comparison with lackluster results from a year earlier. Mitsubishi was in a multiyear revival plan when the global financial crisis struck. It has been building from a relatively low base.

And Mitsubishi emerged as one of the least scathed from the earthquake. Its production base largely is in central Japan, an area untouched by the quake. It was among the first carmakers here to resume limited output while others were stymied by broken supply chains.

But give some credit to President Osamu Masuko and his comeback plan.

The latest quarter’s improvement is an extension of steady growth. His regime of cost cutting and attention to booming emerging markets is delivering results. Indeed, despite regional operating losses in North America, Japan and Europe, a 70 percent surge in operating profit from the increasingly critical regions of Asia and Latin America helped save the day.

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