Mazda quarterly profit surges on higher sales, cost cutting
Editor's note: The percentage increase in operating profits was incorrect in an earlier version of this story. It was 52 percent.
TOKYO -- Mazda Motor Corp. today reported a major increase in operating profit in the latest quarter on the back of rising sales in Europe and Japan and aggressive cost cutting.
Global operating profit rose 52 percent to 72.6 billion yen ($606.3 million) in the Japanese carmaker’s fiscal second quarter ended Sept. 30, from 47.6 billion yen ($397.5 million) a year earlier.
Net income advanced 16 percent to 51.5 billion yen ($430.1 million) in the three months, Executive Vice President Akira Marumoto said while announcing financial results Nov. 5.
Revenue climbed 20 percent to 894.5 billion yen ($7.47 billion). Global retail sales rose 13 percent to 394,000 units.
Mazda’s earnings got a big boost from hefty sales increases in Japan and Europe. North America, by contrast, chipped in only modest gains, as retail volume in Mazda’s biggest market advanced less than 1 percent to 117,000 vehicles.
In the U.S., Mazda sales rose a modest 3 percent to 267,157 vehicles during the year through October. The overall U.S. market is up 6 percent.
Still, in the fiscal first half, North America and Japan delivered healthy increases in regional operating profit that buoyed overall results and offset falling profit in Europe.
Cost control and lower raw material layouts added another 31.4 billion yen ($262.2 million) to quarterly operating profits.
A favorable yen-dollar exchange rate helped earnings, but those gains were erased by losses to other foreign currencies, including the Russian ruble and Australian dollar. Unlike many of its Japanese rivals, Mazda took a net foreign exchange loss.
Looking ahead, Mazda raised it profit and sales forecasts for the current fiscal year ending March 31, 2016.
Mazda now expects to sell 1.515 million vehicles in current fiscal year, or 8 percent more than the previous year.
Mazda lifted the forecast from an earlier outlook of 1.49 million vehicles on an improved outlook for demand in Europe and other markets including Southeast Asia.
Better-than-expected sales will translate into bigger operating profit and higher net income than first forecast, Mazda said.
Operating profit is now seen increasing 13 percent to 230.0 billion yen ($1.92 billion) for the full year, Mazda predicted.
But despite the upgrade, net income is still expected to decline, dropping 2.4 percent to 155 billion yen ($1.29 billion) from the previous year. Mazda had initially forecast net income to fall 12 percent to 140.0 billion yen ($1.17 billion).
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