TOKYO -- Subaru reported a 17 percent profit increase in the latest quarter as the automaker rebounded from the pandemic slump and booked lower warranty costs.
In the fiscal third quarter ended Dec. 31, Subaru's operating profit climbed to 67.6 billion yen ($654.8 million), from 57.8 billion yen ($559.9 million) the previous year.
In reporting financial results on Friday, the automaker also said net income increased 16 percent to 50.5 billion ($489.2 million) in the three months, from the year before.
Revenue declined 2.6 percent to 856.4 billion yen ($8.30 billion) in the October-December quarter, as worldwide sales, which cover wholesale volume overseas, rose by just 6,000 vehicles to 267,800 vehicles in the quarter. U.S. sales led the quarterly advance with a 6.6 percent increase.
Subaru's earnings improved largely thanks to recovering from a year-earlier period when profits were weighed down by big warranty costs. Lower incentives and sales costs also helped.
"Our sales were recovering well especially in the U.S. market," CFO Toshiaki Okada said in Subaru's earnings briefing. "Our sales momentum is good, and we are seeing a smooth recovery."
But looking ahead, the automaker lowered its earnings forecast for the fiscal year ending March 31. Operating profit and net income will both come in lower than predicted in November, undercut by lower-than-expected sales, higher material costs and foreign exchange rates.
Another looming uncertainty is the global shortage of automotive microprocessors, Okada said. Subaru has already suspended operations for two days because of it. The company expects to lose 48,000 units of output in the fiscal year to March 31 because of the shortage, he added.
"As our models are mainly in the C-segment and D-segment and these models use a number of electronically control parts. What's more, we have a limited line-up and use a number of common parts. That's why we are susceptible to a parts shortage," Okada said. "For a company our size, it is not so easy to source parts from a range of suppliers. So, we will take a hard look at how much parts inventory we should have. Honestly, we don't know how long this impact will last."
Subaru now predicts global sales to decline 16 percent to 867,900 vehicles in the current fiscal year. U.S. volume is seen sliding 13 percent to 613,400 vehicles. Operating profit is expected to fall 52 percent in the current fiscal year as net income sheds 51 percent.
Naoto Okamura contributed to this report
