Date: 5th August 2019
Subaru Corp posted a 48 percent rise in the profit before tax for the first quarter of the year on Monday. This success was credited to the increase in global sales, mostly for its Forester and Ascent SUVs in America.
The Japanese automaker reported 92.2 billion yen ($870 million) as its earnings before tax and interest for the first quarter ending June. The profit figure beat the average estimate of eight analysts recorded by Refinitiv, which was 65.6 billion yen. The operating income of the company was 62.1 billion yen last year during the same period.
Subaru fetched 20 percent more sales from the United States, which is the company’s largest market. The US market gets the company 60 percent of its total global sales.
The company retained its outlook of achieving 260 billion yen operating profit for the year ending March 2020. This outlook is 45 percent greater than the operating income for the last year. The company faced a lot of issues last year including stoppages in production and inspection which resulted in its earnings taking a hit.
The Japanese automaker, which is the smallest of Japan’s major automakers, said in a statement that it forecasts its global sales volume to be 1.06 million vehicles. It added that the yen will stand at 110 against the US dollar on average in the current year. Yen averaged at 111 against the dollar last year.
As the yen gets stronger against the US dollar, earnings of Japanese manufacturers are pulled down as exports become more expensive abroad. Moreover, earnings that come from abroad decrease in value.