Isuzu predicts profit will drop after record profit last fiscal year

By From| May 16 2007
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Isuzu Motors Ltd. said Monday that its annual earnings jumped 57 percent to a record high, but predicted that earnings will decline in the current fiscal year due to higher costs and weaker domestic sales.

The truck maker posted a group net profit for the year through March of 92.39 billion yen (US$700 million), up from 58.96 billion yen the previous year.

Group revenue for last fiscal year rose 5.1 percent to 1.66 trillion yen (US$13.8 billion) from 1.58 trillion yen.

But for the year through March 2008, Isuzu expects net profit to fall 13 percent to 80 billion yen (US$666 million). Sales are projected to slip 0.8 percent to 1.65 trillion yen (US$13.7 billion).

The dour earnings outlook for this year sparked a sell-off of Isuzu shares, which fell 6.7 percent to 585 yen (US$4.87) Monday.

Isuzu, which formed a capital alliance with Toyota Motor Corp. in November after dissolving its tie-up with General Motors Corp. in April 2006, said demand for trucks in Japan will likely fall this year as fewer new vehicles will be needed to meet stricter emissions guidelines.

The company is also expecting higher costs for materials and from the development of safety and fuel-efficient technologies.

Its global vehicle sales grew 4.9 percent to 468,301 units last fiscal year, as overseas sales climbed 6.7 percent to 371,500 vehicles. Domestic sales dropped 1.4 percent to 96,801 vehicles.

Isuzu's financial results are based on Japanese accounting standards. (AP)

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