Mitsubishi Motors reports dive in quarterly profit

[February 02, 2011]  TOKYO (AP) -- Net profit at Mitsubishi Motors Corp. skidded 75 percent last quarter, hurt by higher operating expenses and foreign exchange losses.

The Tokyo-based maker of the Galant sedan and Outlander crossover SUV reported Wednesday a net profit of 2.68 billion yen ($32.9 million) for the three months through Dec. 31, compared with a net profit of 10.7 billion yen a year earlier.

Revenue rose 18 percent to 446.17 billion yen ($5.48 billion), reflecting robust demand in Asia and other emerging markets.

But operating profit, a gauge of the health of a company's core business, fell 52 percent to 6.08 billion yen ($74.67 million).

Expenses for advertising, shipping and research and development rose, Mitsubishi said. Taxes and the impact of a strong yen also dragged its bottom line.

Mitsubishi said there had been a "growing sense of uncertainty about the future of the world economy" in the last nine months of 2010 amid European debt concerns and the yen's sharper-than-expected appreciation.

"Overall, however, global auto demand staged a gentle recovery that was driven mainly by China, which continues to grow rapidly, and other emerging nations," it said.

The automaker posted a net loss of 2.25 billion yen ($27.6 million) for the April-December period, compared with a 25.7 billion yen ($315.6 million) loss the year before.

The company maintained its earnings outlook for the full fiscal year through March 31. It continues to forecast a net profit of 15 billion yen on sales of 1.9 trillion yen.

In its midterm business plan announced last month, Mitsubishi outlined efforts to strengthen its lineup for emerging markets such as China and Southeast Asia. It also plans to introduce new electric vehicle models in the coming years. The company last year launched the i-MiEV mini car, one of the few mass-produced electric vehicles on the market.

Mitsubishi released its earnings after stock market trading closed. Its shares were unchanged at 115 yen on the Tokyo Stock Exchange compared with a 1.8 percent jump in the benchmark Nikkei 225 stock average.

The company bases its earnings on Japanese accounting standards.

[Associated Press; By TOMOKO A. HOSAKA]

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