TOKYO — Mazda Motor Corp. said operating profit fell 24 percent in the latest quarter as a slumping wholesale volume, higher incentives and rising r&d costs hit earnings.
Operating profit declined to 39.93 billion yen ($355.4 million) in the Japanese carmaker’s fiscal first quarter ended June 30, the company said Wednesday.
Net income advanced 72 percent to 36.60 billion yen ($325.8 million) for the three-month period. The improvement was against a year-before quarter when net income was particularly depressed by a one-time expense to cover certain foreign exchange rate losses.
Worldwide revenue increased 3.3 percent to 802.06 billion yen ($7.14 billion), as global retail sales rose 0.6 percent to 377,000 vehicles in the quarter.
In announcing results, Managing Executive Officer Tetsuya Fujimoto said results were undermined by a falling wholesale shipments, led by a dialing down of fleet sales in the U.S.
Global wholesale volume slid 5 percent to 297,000 vehicles. In North America, Mazda’s biggest market, imploding passenger car sales undercut profits, as did rising incentives to move sedans.
"Crossover sales retained momentum, but the passenger car market remains tough," Fujimoto said. North American retail sales retreated 6 percent to 106,000 vehicles.
Increasing outlays for r&d lopped off about 6.2 billion yen ($55.2 million) from operating profit. Mazda is booking bigger costs as it invests to develop a next-generation powertrain lineup, dubbed Skyactiv 2, that aims to improve both performance and fuel economy.
Operating profit fell in every region for Mazda, except the home market of Japan, which was flat. North American regional operating profit fell 37 percent to 7.07 billion yen ($62.9 million).
Regional operating profit in Europe also dropped 35 percent to 1.44 billion ($12.8 million), as European retail sales declined 3 percent to 64,000 vehicles in the quarter.
Mazda kept its earnings outlook unchanged for the current fiscal year ending March 31, 2018.
The automaker predicts global operating income will increase 19 percent to 150.0 billion yen ($1.34 billion), in the current 12-month period.
Net income is forecast to rise 7 percent to 100.0 billion yen ($890.2 million) for the fiscal year.
Revenue is seen expanding 4 percent to 3.35 trillion yen ($29.82 billion), as global retail sales advance 3 percent to 1.6 million vehicles. Sales in North America are expected to increase 6 percent to 454,000 vehicles, while Europe is seen growing 2 percent to 267,000 vehicles.
Naoto Okamura contributed to this report