TOKYO (Reuters) – Subaru Corp (7270.T) reported a 48% increase in first-quarter operating profit on Monday as global sales grew, led by demand for the Ascent and Forester SUVs in the United States.
The smallest of Japan’s major automakers posted an operating income of 92.2 billion yen ($870 million) for April-June, versus 62.1 billion yen a year earlier and an average estimate of 65.6 billion yen from eight analysts polled by Refinitiv.
Sales in the United States, by far Subaru’s biggest market, rose 20%. It accounts for about 60% of Subaru’s overall sales.
The maker of Legacy sedans and Forester SUV crossovers maintained its forecast for operating income at 260 billion yen for the year to March 2020, up 45% from a year earlier.
The previous fiscal year was marred by a string of recalls, production stoppages and inspection improprieties that cut the automaker’s earnings in half.
Subaru reiterated its annual forecast for global sales of 1.06 million vehicles. It also left unchanged its assumption that the yen will average 110 against the dollar over the course of the fiscal year, versus 111 last year.
A stronger currency eats into profits because cars exported from Japan become more expensive and the value of earnings made overseas decreases.
Reporting by Kevin Buckland; Editing by Himani Sarkar