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Mitsubishi Motors swings to Q3 profit

Mitsubishi Motors swings to Q3 profit
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First Published: Wed, Feb 03 2010. 11 54 AM IST
Updated: Wed, Feb 03 2010. 11 54 AM IST
Tokyo: Mitsubishi Motors posted its first quarterly profit in more than a year, bolstered by cost cuts and recovering auto demand worldwide.
The Japanese maker of the Galant sedan and Outlander SUV on Wednesday reported a net profit of ¥10.7 billion ($118.3 million) for the October-December quarter, a turnaround from a year-earlier loss of ¥17.5 billion.
The result marked its first net profit since July-September 2008.
Sales in the fiscal third quarter fell 15% to ¥379.1 billion, but lower labor and sales costs led to an operating profit of ¥12.7 billion. Last year, Mitsubishi recorded an operating loss of ¥5.4 billion.
Mitsubishi, one of the smaller Japanese automakers, left its annual forecasts unchanged, saying it remains on track to end the fiscal year through 31 March in the black. It expects a net profit of ¥5 billion on sales of ¥1.5 trillion.
The carmaker, however, said it aims to sell more cars than planned this year. It raised its sales volume target by 3% to 960,000 vehicles from 932,000.
Although revenue for the nine months through December tumbled 43%, business began picking up late last year. A recovering global economy, various government incentives and the company’s own sales promotions combined to spur demand.
December vehicle sales in Japan rose for the second month in a row, and exports jumped 23 percent in the first year-on-year rise in 14 months, according to Mitsubishi. Strong sales in China drove Asia-bound vehicle shipments up 146%.
Its net loss for the April-December period widened to ¥25.7 billion, compared with a ¥4.7 billion loss last year.
Mitsubishi credited a stabilizing economy for its improving prospects but remained cautious about the outlook.
“The economy is far off from performing at pre-crisis levels,” Mitsubishi said in its report. “In particular, in Japan, the economic environment remained severe, with wages and employment levels continuing to worsen.”
Mitsubishi reports earnings based on Japanese accounting standards.
In trading Wednesday, Mitsubishi shares rose 0.8% to ¥127, slightly beating the benchmark Nikkei 225 index’s 0.3% gain.
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First Published: Wed, Feb 03 2010. 11 54 AM IST