TOKYO (Reuters) - Japan's Suzuki Motor Corp booked a better-than-expected 23 percent jump in quarterly profit as its Swift, SX4 and other compact cars powered a robust global sales growth amid record-high fuel prices.
By Chang-Ran Kim, Asia auto correspondent
TOKYO (Reuters) - Japan's Suzuki Motor Corp booked a better-than-expected 23 percent jump in quarterly profit as its Swift, SX4 and other compact cars powered a robust global sales growth amid record-high fuel prices.
Suzuki, valued at $13.6 billion -- just shy of Ford Motor Co's market capitalization -- made an operating profit of 38.3 billion yen ($360 million) in October-December, according to calculations by Reuters based on its announcement of nine-month results on Thursday.
That handily beat an average estimate of 36.1 billion in a Reuters Estimates poll of six brokerages. Net profit for the third quarter climbed 20 percent to 21.62 billion yen, on a 12 percent rise in revenue to 849.92 billion yen.
!ADVERTISEMENT!Suzuki has been expanding at the fastest clip among Japan's healthy automakers, largely helped by its lead in the fast-growing Indian market. Its local subsidiary, Maruti Suzuki India Ltd, this week also beat expectations with a 24 percent rise in quarterly net profit helped by solid sales of more profitable cars such as the Swift hatchback and SX4 sedan.
To keep up with demand, which is also speeding ahead in Europe, Suzuki has been expanding its production facilities around the world including in Hungary, India and Japan.
In the third quarter, its global production rose 9.9 percent to 680,000 cars, with output increasing 6.1 percent in Japan and 18 percent in the rest of Asia also thanks to a recovery in the Indonesian car market.
In Hungary, it manufactured 7.3 percent more cars to feed growing demand in both Western and Eastern Europe.
Suzuki, which has a relatively small exposure to the U.S. market, and hence the dollar, enjoyed currency gains of 4.7 billion yen in the quarter as the yen weakened favorably against the euro, Indian rupee and other currencies.
A rise in raw materials costs was a drag, but the company managed a net gain from cost reduction efforts of 6.7 billion yen. Improved vehicle sales contributed 13.9 billion yen to the rise in operating profit.
Suzuki, which is known for its ultra-cautious projections, left its annual forecasts unchanged at 145 billion yen for operating profit and 82 billion yen at the net level.
Consensus forecasts from 18 brokerages as of Thursday see an operating profit of 154.8 billion yen and net earnings of 88.5 billion yen, up 16-18 percent from 2006/07.
A day earlier, fellow Japanese car and motorcycle maker Honda Motor Co reported a stronger-than-expected 38 percent surge in three-month net profit as it shrugged off soft U.S. demand with brisk overseas sales growth. A weak yen against currencies other than the dollar also helped, prompting it to raise its full-year profit forecasts.
As with Honda, Suzuki's motorcycle sales in the United States suffered as consumers pulled back purchases of leisure products amid the subprime credit woes, a spokesman said.
Suzuki's shares lost 23 percent in the past 12 months, largely in line with the Tokyo market but better than a 26 percent fall in the transport sector subindex ITEQP.
Before the results announcement, they ended up 5.1 percent at 2,675 yen, outpacing the sector's 4 percent rise.
