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Mazda Profit Surges Nearly 16-fold


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Mazda Profit Surges Nearly 16-Fold

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The Associated Press

By CARL FREIRE

July 28, 2006

"
We have achieved year-on-year profit gains across the board for the first quarter (and) Mazda's mid-term business plan ... continues on track
"

Mazda Motor Corp. said profit surged nearly 16-fold in the April-June quarter from a year earlier as solid sales of its minivan and sport convertible models in the U.S. and Europe offset sluggish domestic sales.

The Japanese affiliate of Ford Motor Co. posted a group net income of 6.61 billion yen, or $57 million, in the fiscal first quarter, up from the 419 million yen it posted a year earlier.

The profit jump was also due to sharply trimmed special losses after it booked a one-time loss of about 21 billion yen ($181 million) related to its reappraisal of fixed assets a year earlier.

Sales grew 9.5 percent to 734.30 billion yen ($6.33 billion) in the quarter from 670.78 billion yen, the Hiroshima-based automaker said. It based its earnings on Japanese accounting standards.

'We have achieved year-on-year profit gains across the board for the first quarter (and) Mazda's mid-term business plan ... continues on track,' said Mazda Representative Director and Chief Financial Officer David E. Friedman in a statement. Ford owns about a third of Mazda.

Healthy sales of the Mazda5 minivan and Mazda MX-5 Miata sports car in the American and European markets lifted revenues, the company said.

The weakening of the yen against other major currencies, which makes exports more competitive and inflates sales when repatriated to Japan, also helped to boost revenues, it said.

The company's new Mazda CX-7 sports utility vehicle also had a successful launch in the North American market, it said.

However, a rise in overall costs cut into operating profits by 1 billion yen, it said. Operating profit climbed almost 30 percent to 29.61 billion yen ($255.32 million) from 22.82 billion yen the previous year.

Worries about rising material costs sent Mazda's stock down 3.0 percent to 748 yen ($6.45) in Tokyo. The company's share price has nearly doubled in the last year.

Mazda is the latest Japanese automaker to report a rise in profits for the April-June quarter, following on the heels of Honda Motor Co. and Nissan Motor Co.

Japan's No. 1 automaker, Toyota Motor Corp., reports earnings next week. Mazda left unchanged its group earnings forecast for the current fiscal year through March 2007. The company expects a record net profit of 75.00 billion yen ($646.72 million) and an all-time high operating profit of 135.00 billion yen ($1.16 billion), supported by group sales of 3.100 trillion yen ($26.73 billion).

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