TOKYO -- The maker of Subaru cars has lifted its already rosy full-year profit and sales forecasts on the back of a weaker yen and plans for a fifth-straight year of record U.S. sales.
Fuji Heavy Industries Ltd now sees net income surging 49 percent to 178.0 billion yen ($1.81 billion) in the fiscal year ending March 14, 2013, from 119.6 billion yen ($1.22 billion) the year before.
That compares with an early outlook, released in July, for full-year net income of 121.0 billion yen ($1.23 billion).
The company also raised its revenue outlook.
Revenue is now expected to climb 20 percent to 2.3 trillion yen ($23.4 billion) in the fiscal full-year, from 1.913 trillion ($19.48 biilion) the year before.
The new target marks an improvement over July's forecast for revenue of 2.08 trillion yen ($21.18 billion).
Fuji Heavy also lifted its full-year unit sales forecast, fueled by surging U.S. demand for Subaru cars.
Global sales will grow 11 percent to 807,300 units, from 724,500 in the previous fiscal year. Just three months ago, Subaru had predicted sales would climb to a more meager 751,500.
The United States, Subaru's biggest market by far accounting for more than half its global volume, will count for the bulk of that expansion. Fuji Heavy expects sales there to climb 22 percent to 434,800 units in the fiscal year.
It had predicted full-year U.S. sales of 384,900 units in July.
Favorable yen, booming demand
President Yasuyuki Yoshinaga said the improved outlook builds on a more favorable yen-dollar exchange rate and booming U.S. demand. It expects U.S. sales to rise for a sixth-straight year this calendar year and chalk their fifth year of record results.
"I'm told told by dealers there that we can keep on going next year," Yoshinaga said. "They say there's no risk."
The yen's weakening against foreign currencies is expected to add 133.4 billion yen ($1.36 billion) to Fuji Heavy's full-year operating profit. The tumble against the dollar is seen accounting for nearly 95 percent of that windfall.
A weaker yen increases the value of dollar-based sales when repatriated to Japan and booked as yen on the balance sheet.
U.S. plant expansion
To meet surging demand, Subaru plans to expand capacity at its Indiana assembly plant, its only factory in North America.
Subaru capacity at the factory, which also has a line dedicated to producing the Toyota Camry sedan, will climb to 300,000 units a year by the end of 2016, from 170,000 units this summer.
Capacity at Fuji Heavy's two plants in Japan is expected to max out at 622,000 units after an expansion of its Gumma plant next summer to eke out an additional 20,000 cars a year.
The company said it is now considering a feasibility study of ways to expand capacity at its flagship Yajima assembly plant, which has plateaued at capacity of 422,000 units.
For the July-September fiscal second-quarter quarter, Fuji Heavy's net income more that doubled to 51.34 billion yen ($522.7 million), from the same quarter the previous year.
Quarterly revenue rose 23 percent to 578.7 billion yen ($5.89 billion), from a year before.
Global sales advanced 11 percent to 201,800 vehicles.
Fuji Heavy did not give quarterly earnings figures. The second-quarter breakout was derived by subtracting first quarter results from half-year figures.