Mazda’s Net Income Drops 23%

Mazda Motor Corp.’s operating profit in July-September rose 2%. But net earnings plummeted 23% to 26.7 billion yen ($234 million).

The carmaker’s revenue for the fiscal second quarter climbed 11% to 854.5 billion ($7.5 billion). Unit sales grew less than 2% to 406,000, held down by a product lineup not aligned with the global market’s mania for crossover vehicles.

Mazda’s operating profit for the quarter advanced to 36.6 billion yen ($321 million) from 35.9 billion yen in the same period last year. The effect of favorable exchange rates were largely offset by a one-time charge of 6.4 billion yen ($56 million) for recalls to replace explosion-prone Takata Corp. airbag inflators.

On a regional basis, Mazda’s EBIT jumped 87% to 5.6 billion yen ($49 million) in North America, its largest national market. Unit sales advanced only 1% to 112,000 units. In Europe, the company reversed a 100 million-yen loss last year with a 2.2 billion-yen ($19.3 million) operating profit, even though unit sales were unchanged.

Mazda affirms its prior guidance about full-fiscal-year results. The carmaker expects gains of 19% to 150 billion yen ($1.3 billion) in operating income and 7% to 100 billion yen ($877 million ) in net income. Unit sales and revenue are forecast to grow 3% to 1.6 million vehicles and 4% to 3.4 trillion yen ($29.8 billion), respectively.