TOKYO -- Mitsubishi Motors Corp. on Thursday posted a smaller interim net loss than it had forecast as aggressive marketing boosted domestic sales, but it offered a cautious outlook and its shares fell 3 percent.
Mitsubishi, Japan's only loss-making carmaker, said it still aimed to become profitable in the latter half but committed only to breaking even, allowing room for an uncertain U.S. market and risks of a slowdown in global demand due to lofty energy prices.
"This is by no means a downward revision (for the rest of the year)," Hiizu Ichikawa, managing director in charge of finance, told a news conference. "Our internal target of returning to the black in the second half is intact. The (unchanged) full-year numbers are more a commitment than a forecast."
Net loss in the six months to Sept. 30 was 63.77 billion yen ($542.5 million), an improvement from its May forecast of 73 billion yen and better than a restated loss of 178.79 billion yen a year earlier, when it booked massive restructuring charges.
Revenue of 991.26 billion yen also overshot its projection but was down 7.4 percent from last year, as sales in the important U.S. market struggled to recover.
Operating loss improved to 19.79 billion yen from 76.41 billion yen.
For the year to March 2006, the maker of the Pajero SUV kept its projection for a net loss of 64 billion yen and an operating loss of 14 billion yen. Consensus projections from eight analysts surveyed by Reuters Estimates put this year's net loss at 63 billion yen and operating loss at 21 billion yen.
Mitsubishi Motors, held 13 percent by DaimlerChrysler AG, kept its global sales target at 1.37 million vehicles for the current business year, but with a lowered forecast in North America.
CEO BAFFLED BY BUOYANT SHARES
After a recall scandal triggered a plunge in its domestic sales last business year, Mitsubishi is crawling back from the scrap heap with improving sales thanks to aggressive marketing.
Its shares have also benefited, doubling in price since mid-September on anticipation that new heavyweight Chief Executive Osamu Masuko would produce a successful turnaround along the lines of Nissan Motor Co. under Carlos Ghosn -- especially after Mitsubishi's recent launch of key new products such as the Outlander SUV and Raider pickup.
But the climb has been driven by hopeful Internet investors, who now number 300,000 -- five times the number a few months ago -- and industry analysts remain downbeat on the stock.
Even Masuko admitted he was baffled by the 12 percent one-day jump in Mitsubishi Motor's shares on Monday, when he noted there was no trigger on the newsfront.
"Generally speaking, it's a good thing when a company's stock rises," he said. "But I must admit I couldn't help but wonder about the sharp rise on Monday."
Further investigation revealed that Internet traders were behind the uptick, he said, and added: "If it is a reflection of the expectation people have for us, then all I can say is we will do our best to respond to it."
Mitsubishi Motor's shares touched a three-year intraday high of 363 yen on Tuesday. After the results, they ended Thursday down 2.85 percent at 307 yen for a third straight day of decline.
That still puts Mitsubishi Motor's price-to-earnings ratio -- an indicator of the market's view of a company's earnings potential -- at a disproportionately high 33 based on the company's ambitious net profit target of 41 billion yen in the year ending March 2008.
That's more than double the ratio of 15 at Toyota Motor Corp., the world's most profitable automaker.
Mitsubishi Motors shares were the best performer in Japan's auto sector in the half-year period, surging 66 percent to 233 yen, compared with a 24 percent jump in the transport sector subindex.