Subaru profit falls 27% despite higher N. America sales

Subaru Corp.'s operating profit tumbled 27 percent in the just-ended fiscal year, as foreign exchange losses and spiraling costs broke a three-year run of record financial results.

Subaru, which changed is corporate name from Fuji Heavy Industries on April 1, said operating income fell to 410.8 billion yen ($3.69 billion) for the company's full fiscal year ended March 31. Net income dropped 35 percent to 282.4 billion yen ($2.54 billion).

The slide ended three straight years of record operating profits and net income, despite that fact that the Japanese carmaker exceeded annual sales of 1 million units for the first time.

Revenue increased 2.9 percent to 3.33 trillion yen ($29.9 billion) in the 12 months ended March 31, driven by an 11 percent increase in worldwide sales to 1.1 million vehicles, the company said Tuesday, while announcing financial results.

Subaru posted record revenue and unit sales for a fifth straight year.

North America, which accounts for about 68 percent of Subaru's global sales, underpinned the sales expansion. Regional sales there grew 14 percent to 721,000 vehicles. U.S. sales expanded to 667,600 from 582,700 the year before. Canada sales grew to 53,100 from 47,600.

European sales declined 2.6 percent to 46,000 vehicles, while Subaru volume in Japan and China also posted declines for the fiscal year.

"U.S. demand has peaked out," Subaru CEO Yasuyuki Yoshinaga said. "The market environment has increasingly become tougher. We will carefully examine the situation and will take the necessary steps to maintain our sales, including incentives."

Yoshinaga said Subaru will adjust U.S. production to slowing demand to clear inventories.