TOKYO, Apr 27 (Reuters) Mitsubishi Motors Corp. on Thursday posted better-than-expected annual results, scoring an operating profit for the first time in three years, but stuck to its profit targets for the next two years as it struggles to restore its key U.S. business.
The restructuring Japanese auto maker has seen its domestic sales improve thanks to the new Outlander SUV and i minicar, but demand in the United States, where Mitsubishi used to make all of its money, has sunk almost every month in the past year.
For the business year that ended on March 31, Tokyo-based Mitsubishi Motors booked an operating profit of 6.78 billion yen ($59 million), rescued by a softer yen, better than its own guidance of a 14 billion yen loss and a mean loss projection of 9.1 billion yen in a poll of eight analysts by Reuters Estimates.
In the year before, it reported a loss of 128.5 billion yen.
At the net level, it had a loss of 92.17 billion yen in 2005/06, against a consensus loss estimate of 59.8 billion yen.
For the current year to March 2007, Mitsubishi forecast an operating profit of 43 billion yen and a net profit of 8 billion yen based on an average dollar rate of 115 yen and a euro rate of 135 yen. The profit projections were unchanged from Mitsubishi's plan announced in January 2005, which were based on dollar and euro assumptions of 105 yen and 125 yen, respectively.
Market estimates call for an operating profit of 29.5 billion yen and a net loss of 767 million yen.
A healthy North American operation -- a cash cow for most of its domestic competitors -- is crucial for Mitsubishi Motors to nurse its overall business back to health. Executives are counting on more products, including the Outlander, to drive U.S.
sales this year.
Last year, Mitsubishi, which came under the consolidated accounts of sister company Mitsubishi Heavy Industries Ltd. in December, launched the Eclipse sports coupe and Raider pickup truck as many consumers shifted to more fuel-efficient vehicles to save cash at the pump.
During the 12 months to March 31, shares in Mitsubishi Motors soared 77 percent, outpacing the 50 percent jump in Tokyo's transport sector subindex ITEQP.
The stock was up 2.88 percent at 250 yen in late afternoon trade, mirroring healthy rises in other Japanese auto shares.
($1=114.84 Yen) REUTERS CS SND1201