Mazda logs drops in operating and net profits for fiscal 3rd quarter of 2014

Article by Christian A., on February 10, 2015

Mazda Motor Corp. saw its global operating profit drop 5.1 percent in its third fiscal quarter ended December 31, 2014 to JPY48.0 billion ($400.2 million) and its global net income fall 27 percent to JPY38.2 billion ($318.5 million). The slumps came despite a 7.8-percent surge in global revenues to JPY739.7 billion ($6.17 billion) and a 3.7-percent climb in vehicles sales to 322,000 units.

According to Tetsuya Fujimoto, executive officer for financial services, the lower profits were due to a shift toward lower-margin nameplates like the Mazda2 subcompact, as customers waited for more expensive yet higher-margin models like the Mazda6 sedan to undergo minor model changes. Likewise, corporate taxes were 25-percent higher and the surge in vehicle sales only added JPY700 million yen ($5.8 million) to its quarterly operating profit.

Foreign exchange rate windfalls were at JPY5.6 billion ($46.7 million). Mazda saw its quarterly sales jump 4.4 percent in North America (to 94,000 vehicles), 13 percent in Europe (to 53,000 units), and 3.9 percent in Japan (to 53,000 vehicles). Sales in China, Southeast Asia and Australia, however, were flat.

With situation on hand, the carmaker cut its global sales outlook by 20,000 vehicles to 1.4 million for the fiscal year ending March 31, 2015 – which is still 5-percent higher than last year’s volume.

Mazda also trimmed its sales outlook in North America from 440,000 units to 432,000 vehicles, which is 11 percent higher than last year’s results. According to Managing Executive Officer Masahiro Moro, Mazda is expecting to give up some volume as it tries to keep its pricing intact while its rivals spends much money on incentives.

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