Mazda profit up on solid vehicle sales growth
TOKYO—Fiscal first quarter profit at Mazda, the Japanese automaker affiliated with Ford, surged to 14.98 billion yen ($140 million) -- more than sixfold net earnings a year ago -- on an accounting change and robust vehicle sales in China and Europe.
Hiroshima-based Mazda Motor Corp. said Thursday that it sold 358,000 vehicles worldwide during the April-June period, up nearly 11 percent from the same period the previous year. Models such as the Mazda2 and Mazda3 compacts were popular.
But an unfavorable exchange rate fluctuation, with the dollar plunging against the yen from the previous year, eroded Mazda's revenue sales. Quarterly sales slid 5 percent to 771.8 billion yen ($7.2 billion) from 814.3 billion yen the year before.
Mazda said the dollar had traded at 105 yen in the three months ended June 30, down sharply from an average of 121 yen the same period the previous year.
Despite the soaring cost of raw materials, Mazda's quarterly profit jumped dramatically from a year earlier partly because of tax accounting changes, the company said in a statement.
Mazda -- Japan's fifth biggest automaker and an affiliate of Ford Motor Co. of the U.S. -- posted a profit of 2.48 billion yen during the April-June quarter in 2007.
Profit growth was solid even without the accounting change, as Mazda's vehicle sales rose in every major region outside Japan, where the overall market has been sluggish for years.
Without the accounting change, quarterly profit would have jumped 43 percent on year, according to Mazda.
Vehicle sales gained 3 percent in the U.S. because of brisk sales of the Mazda3. In China, the Mazda2 as well as the Mazda 3 boosted sales to more than double the previous year.
In the "other market" category, vehicle sales gained 9 percent, driven by good demand for the Mazda2 and CX-9 sport utility vehicle.
"Mazda has achieved growing global sales in the first quarter of fiscal year 2008 despite difficult business conditions," said Mazda Chief Financial Officer David Friedman.
Mazda kept its forecast for the fiscal year ending March 31, 2009, for 70 billion yen ($654 million) profit. It also held steady its full year sales outlook at 3 trillion yen ($28 billion).
Mazda has been one bright spot in Ford's bleak performance lately. Ford lost $8.7 billion in the April-June quarter, its worst-ever quarterly loss.
Ford, like General Motors Corp., has struggled more than its Japanese counterparts to switch from trucks, whose profit margins are hefty, to smaller fuel-efficient models as consumer needs change because of soaring gas prices.
Mazda shares edged up 0.5 percent to 626 yen ($5.9). Mazda announced earnings after Tokyo trading closed.
