Subaru’s Revenue, Earnings Fall

Subaru Corp. blames fewer wholesales in the U.S., higher fixed costs and the effect of a regulatory scandal in Japan for cutting revenue 6% and net income 10% in January-March.

The shrinkage reduced revenue to 841 billion yen ($7.7 billion) and net profit to 68 billion yen ($617 million) in the company’s fiscal fourth quarter. Operating income for the period fell 30% to 73 billion yen ($688 million).

For the full fiscal year, Subaru’s unit sales were flat at 1.07 million cars. Revenue gained 2% to 3.4 trillion yen ($31 billion). But operating profit shrank 8% to 379 billion yen ($3.5 billion), and net profit plunged 22% to 220 billion yen ($2 billion).

In North America, which generates two-thirds of Subaru sales, retail deliveries rose 4% to 147,900 units in the 12-month period. But operating profit plummeted 35% to $634 million. In Japan, improperly inspected cars hiked recall costs and cut sales 15% to 46,900 units in the final quarter.

Subaru predicts its operating income in the current fiscal year will fall another 21%, marking the third consecutive year of decline. The company anticipates its wholesales will grow 3% to 1.1 million cars worldwide.