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Mazda's profit drops 62 per cent in quarter on forex accounting, R&D spending

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TOKYO (AP) _ Mazda reported a 62 per cent drop in April-June profit on Tuesday, but Japan's No. 4 automaker stuck with its forecast for a record profit for the full year on growing global sales.

Mazda Motor Corp., a rare bright spot in faltering Ford Motor Co.'s group, said the latest numbers were within expectations, with the drop resulting mainly from foreign-exchange related accounting expenses and greater research investment.

Mazda's profit slipped to 2.48 billion yen (US$20.9 million) for the three months ended June 30, down from 6.61 billion yen the previous year. A weak yen usually is a plus for Japanese exporters like Mazda but this time it resulted in some losses due to forward foreign exchange contracts, the company said.

Quarterly sales jumped 11 per cent on-year to 814.29 billion yen ($6.85 billion), the Hiroshima-based manufacturer said.

Mazda, which makes the Miata convertible and RX-8 sports, said it's headed for its fourth straight year of record earnings for the fiscal year ending March 2008, with 85 billion yen ($715.5 million) in profit, up 15 per cent from fiscal 2006.

Mazda, 33.4 per cent owned by Ford, is projecting fiscal year sales to edge up 2 per cent to 3.320 trillion yen ($27.95 billion).

Global vehicle sales are expected to climb four per cent to 1.35 million vehicles for the fiscal year ending March 2008, up from about 1.30 million the previous fiscal year, it said in a statement.

``Going forward, we are aiming to steady growth,'' said Mazda representative director David Friedman.

He said the rollout of the Mazda2 in Japan was going well, and other cars were in the works for other regions for later this year.

Mazda has been ramping up domestic production capacity, strengthening its car lineup, developing technology and taking more control of its dealer networks in North America.

Mazda has been restructuring since suffering a huge loss in fiscal 2001, when it was hit by costs to trim its work force in Japan.

For the latest quarter, retail sales volumes were up in North America on-year, especially in Canada and Mexico, totaling 108,000 vehicles, up 6 per cent from the same period a year earlier.

But sales slipped in Japan, where the auto maket has been sluggish for years, declining seven per cent to 57,000 vehicles, it said.

Demand was strong for the CX-7 sport utility vehicle, BT-50 truck and Mazda3 compact in other global markets, according to Mazda.

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Mazda's profit drops 62 per cent in quarter on forex accounting, R&D spending
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