Suzuki Q1 up as sales advance, Mazda lifted by yen
TOKYO (Reuters) -- Japan's Suzuki Motor Corp. posted a double-digit rise in quarterly profits as sales of its compact cars grew globally, while a weak yen helped Mazda Motor Corp. report solid operating profit growth.
Both automakers left their full-year profit forecasts unchanged citing volatile exchange rates and unpredictable raw materials prices.
Suzuki has been struggling to keep up with demand as high fuel prices steer more consumers towards small, fuel-sipping cars such as its Swift hatchback, particularly in Europe and South Asia.
Mazda, meanwhile, has said it would rein in production during the first half to Sept. 30 to adjust the high levels of inventory in the U.S. market.
For the April-June first quarter, Suzuki's operating profit surged 19 percent to 40.49 billion yen ($340.4 million) and net profit jumped 20 percent to 24.36 billion yen.
Revenue grew 17 percent to 894.53 billion yen as a rapid expansion in overseas sales pushed global car sales up 6.6 percent to 571,000 units.
Both Suzuki and Mazda got a big boost from the yen's weakening, especially against the euro.
Hiroshima-based Mazda, owned one-third by Ford Motor Co., posted a 9 percent rise in three-month operating profit to 32.26 billion yen, lifted by a 9.2 billion yen currency windfall and sharp cost reductions.
Revenue grew 11 percent to 814.29 billion yen, although global vehicle sales inched down 0.8 percent to 323,000 units as domestic demand sputtered and U.S. sales stayed flat.
Net profit fell 63 percent to 2.48 billion yen due to a higher one-off tax burden.
"Inventory adjustment (in North America) is progressing and we will be able to complete the program by the end of the first half," Mazda Chief Financial Officer David Friedman told a news conference.
Mazda plans to slash a total 20,000 units of inventory in the United States during the first half. It worked down half that in the latest quarter.
Mazda kept its full-year projections for operating profit to rise 0.9 percent to 160 billion yen and net profit to grow 15 percent to 85 billion yen. A survey of 19 brokerages by Reuters Estimates has Mazda's operating profit forecast for the year to March 2008 at 166.7 billion yen.
Suzuki also left unchanged its conservative annual forecasts for a slight rise in revenue and profits. Market estimates expect Suzuki to overshoot its operating profit forecast of 134 billion yen for the year to March 2008 by 15 percent.
