Mitsubishi slumps to quarterly loss, multiplying alliance woes

TOKYO -- Embattled Mitsubishi Motors reported a loss in the last quarter as falling revenue, foreign exchange losses and rising r&d costs broadsided earnings. The automaker swung to an operating loss of 6.6 billion yen ($60.5 million) in the fiscal third quarter ended Dec. 31, the company said in results published on Friday. That compared with an operating profit of 28.1 billion yen ($257.7 million) a year earlier. The company also slumped to a net loss of 14.4 billion yen ($132 million), from positive net income of 17.3 billion yen ($158.6 million), for a second-straight quarter of net losses. Revenue shrank 14 percent to 538.9 billion yen ($4.94 billion), as worldwide retail sales retreated 5.3 percent to 284,000 units, amid declining deliveries in Japan, Europe and Southeast Asia. Slackening demand in key markets such as Japan, China and Southeast Asia -- the company's biggest -- undercut quarterly returns, CFO Koji Ikeya said while announcing the results. The Japanese yen's appreciation against the Thai baht, U.S. dollar and euro took another bite. And spiraling outlays for next-generation technologies worsened the hit. "The overall business environment is harsh," Ikeya said. Mitsubishi's plunge exacerbates an earnings crisis confronting its alliance partners, Renault and Nissan. Mitsubishi's automotive allies are under similar pressure from volatile sales and slumping profits, as the three-way alliance struggles to find its feet following the arrest of former alliance Chairman Carlos Ghosn and the tumult it unleashed. Ikeya declined to comment on possible restructuring plans that Mitsubishi may take to right its course. The leaders of the three companies met a day earlier to outline a new strategy for splitting work and said that the automakers would hammer out new mid-term business plans by May. Mitsubishi CEO Takao Kato, who took office last June, is trying to reel in inventories to adjust to contracting demand while cutting costs to forestall an annual loss for the current fiscal year.

Mitsubishi slumps to quarterly loss, multiplying alliance woes

Featured Stories