Mazda oper profit jumps 49 pct, more growth seen

TOKYO, Apr 28 (Reuters) Mazda Motor Corp. beat expectations on Friday with a 49 percent surge in annual operating profit, riding a softer yen, brisk car sales and cost cuts, and it forecast stronger-than-expected growth fuelled by the CX-7 crossover and other new models.

The results far outpaced Mazda's own estimates, lifted just two months ago, and underscored the Hiroshima-based firm's solid product-led momentum as it focuses on beefing up its brand value.

Mazda joins fellow Japanese auto makers such as Honda Motor Co.

and Daihatsu Motor Co. in posting a double-digit profit rise, although its sales at home and in the United States have been up and down.

A Mazda official said domestic retail sales would likely stay flat this year capped by an ageing compact car line-up, but that demand in the United States should zoom ahead as it launches the CX-7 in May and the CX-9 crossover early next year.

''This year's profit growth will be driven first and foremost by rising sales,'' Keishi Egawa, executive officer in charge of finances, told a news conference.

The rising fortunes of Japan's car makers stand in contrast with the difficulties nagging Detroit's General Motors Corp. and Ford Motor Co., which expect to close multiple plants and slash thousands of jobs as they cede sales to Asian rivals.

For the current year that began on April 1, Mazda, in which Ford has a controlling one-third stake, forecast a 9 percent rise in operating profit to 135 billion yen, against a forecast of 131.4 billion yen by 15 analysts surveyed by Reuters Estimates.

With revenue expected to rise 6.2 percent to 3.1 trillion yen, its operating margin would improve to 4.4 percent.

Net profit for 2006/07 is expected to rise 12 percent to 75 billion yen.

It made the rosy forecasts despite its assumptions that the yen will strengthen to an average 110 yen against the dollar and 135 yen against the euro, shaving 15.5 billion yen from operating profit.

Mazda also projected a near-10 billion yen jump in capital spending for this year to 82 billion yen, mainly to develop new models but also to beef up production of engines and transmissions, as well as expand assembly capacity in Japan.

The maker of the MX-5 sports coupe said it expects its global shipments this business year to rise 5.3 percent to 1.21 million units -- short of the 1.25 million targeted under its mid-term Mazda Momentum plan.

In the year ended March 31, net profit jumped 46 percent to 66.71 billion yen, while operating profit totalled 123.44 billion yen, beating the consensus estimate of 118.5 billion yen. All profits marked a record high.

Mazda has enjoyed particularly robust demand in Europe, where the availability of more diesel engines is fuelling sales, and in China, where it now commands a 3.7 percent share of the passenger car market.

Given the bumper results, Mazda raised its dividend for the just-ended year to 5 yen from a previously forecast 3 yen. It also projected 5 yen for the current year.

During the 12 months ended March 31, Mazda's shares nearly doubled in value to 715 yen, clocking the biggest gain among Japanese car assemblers. Tokyo's transport sector subindex ITEQP.rose 50 percent in the same period.

Before the news, Mazda's shares closed the morning session down 0.3 percent at 730 yen, while the transport sector lost 0.91 percent.

REUTERS CS PM0928