Suzuki Motor Corp. issued a rare operating profit outlook among Japan’s automakers that topped analysts’ average projection, underscoring the smaller manufacturer’s resilience during a pandemic that has decimated sales and profit among competitors.
Japan’s fourth-biggest car company is targeting an operating income of ¥160 billion ($1.5 billion) for the fiscal year through March, the company said Thursday. That compares with analysts’ average projection for ¥123 billion and even the highest forecast for ¥155 billion, according to data compiled by Bloomberg.
Shares in Suzuki climbed 4.9% to their highest since Feb. 18, leaving the stock up 7.2% this year. The shares of Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co. have all declined this year as the pandemic eroded their sales and profits.
Suzuki had a lucky break earlier this year, avoiding the initial downturn in business activity in China, where the new coronavirus originated. The company also saw little impact from U.S. President Donald Trump’s threat to slap tariffs on automobile imports last year, because it was already reducing its footprint in North America.
"Suzuki’s operating profit could continue to recover in the third quarter and beyond as its automobile units sales, particularly in core markets such as India and Japan, improve steadily,” Tatsuo Yoshida, an analyst at Bloomberg Intelligence, wrote in a report.
The automaker plans to start operating the Gujarat C plant in India in April next year, the company said in a statement. Sales of automobiles will decrease 20% during the current fiscal year, Suzuki said.
Suzuki reported sales of ¥845 billion for the quarter that ended in September, exceeding analysts’ projection for ¥802 billion. Operating income for the period was ¥74 billion, compared with the average prediction for ¥25 billion.
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