Mazda reports 2Q loss, projects annual loss

AP News
Posted: Nov 02, 2011 6:37 AM
Mazda reports 2Q loss, projects annual loss

Mazda reported its fourth straight quarterly loss Wednesday after vehicle sales slumped amid a sluggish global economy and high yen. The company now projects a big annual loss instead of a profit.

Mazda Motor Corp. is facing the same tough business environment as other Japanese manufacturers whose production was just starting to recover from the devastating March 11 earthquake and tsunami in northeastern Japan.

Mazda said its loss for the July-September quarter came to 14.4 billion yen ($185 million).

The Hiroshima-based automaker now expects a loss of 19 billion yen ($244 million) for the fiscal year through March 2012, down from an earlier projection of a 1 billion yen ($12.8 million) profit.

Mazda said it is struggling with slower growth in Asian markets, a limping U.S. economic recovery and the debt crisis in Europe.

The company has also been hit by the strong yen, which has reached several record highs against the dollar. Every time the yen climbs, the value of the company's repatriated profits shrinks when converted back to yen. A strong yen also makes products more expensive overseas.

Mazda's red ink for the latest quarter follows a 25.5 billion yen loss in the April-June period.

Quarterly sales at the Hiroshima-based automaker totaled 551 billion yen ($7.1 billion), down from 579.66 billion yen a year earlier.

The maker of the Miata and RX-8 sports cars said it sold 604,000 vehicles worldwide for the July-September quarter, down 8.3 percent. Sales declined in Japan, Europe and China, Mazda said.

For the first six months of the fiscal year, the company reported a loss of 40 billion yen ($512 million), compared to 5.5 billion yen profit a year ago.

Mazda shares closed down 5.4 percent at 158 yen on the Tokyo Stock Exchange just before the company released the earnings results.