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TOKYO — Subaru profits plunged by two-thirds in the latest quarter as crimped production and falling sales hammered results, driving backorders higher and forcing the automaker to cut its earnings outlook with no clear signs of relief from the ongoing semiconductor crisis.
Subaru Corp.’s operating profit dropped 66 percent to 22.7 billion yen ($197.2 million) in the fiscal third quarter ended Dec. 31, the automaker said in a statement on Monday.
Subaru said it was hit by rising raw material costs in addition to slumping volume due to the ongoing global microchip shortage. Subaru’s worldwide output fell 20 percent to 207,000 units in the October-December period, for a 11 percent production slide in the first three quarters.
Worldwide sales tumbled 35 percent to 173,000 in the latest three-month period.
Subaru again downgraded its sales outlook, for the third time this year. It now expects to sell 740,000 vehicles in the full fiscal year ending March 31, 2022. That represents a 14 percent decline from the previous year and is way off the automaker’s previous goal of 830,000 units, which was down from a revised 960,000 units. It originally forecast global volume of 1.0 million vehicles.
Subaru is especially susceptible to the semiconductor logjam because of its small size and extensive use of commonized components, executives say. CFO Katsuyuki Mizuma said it was still unclear when supply chains and production levels would return to normal for Subaru.
The production bottleneck is causing backorders to balloon as Subaru fails to deliver product.
Backorders in the U.S. soared to 42,000 vehicles in the October-December quarter, from 30,000 in July-September and 17,000 in April-June. At the beginning of 2021, they stood at just 5,000.
Mizuma said the backorders are likely to keep growing and that Subaru is working with dealers to keep customers from growing frustrated and canceling their orders. Subaru had to suspend operations at its plant in Japan for six days in late January, further denting deliveries.
For a second time, Subaru also lowered its operating profit outlook for the current fiscal year ending March 31, 2022. It now expects operating profit to dip to 100.0 billion yen ($868.9 million).
That is down from its previous target of 150.0 billion yen ($1.30 billion) and its original goal of 200.0 billion yen ($1.73 billion). The revised forecast is down from 102.5 billion yen ($890.6 million) booked the year before. Subaru also cut its forecasts for full-year net income and revenue.
Subaru blamed falling sales and rising raw material costs for the downwardly revised outlooks.
In the October-December period, the all-wheel-drive niche player said net income slid 64 percent to 18.1 billion yen ($157.1 million). Revenue retreated 22 percent to 665.9 billion yen ($5.78 billion) in the three months. U.S. sales, which cover wholesale volume, led the global volume plunge with a 39 percent drop to 119,000 units in the quarter.
Sales in Europe, excluding Russia, inched ahead, adding 1,000 units to 4,000 vehicles.
Naoto Okamura contributed to this report