Mazda first quarter profit drops on weak North American sales

FILE PHOTO: The logo of Mazda is pictured at its dealership in Tokyo, Japan, February 16, 2017. REUTERS/Toru Hanai/File Photo

TOKYO (Reuters) - Japan’s Mazda Motor Corp on Wednesday posted a 24 percent drop in its first-quarter profit, hurt by a slump in sedan sales in the United States where consumers continue to opt for SUVs and other larger models.

Operating profit at Japan’s sixth-largest automaker came in at 39.9 billion yen ($360.24 million) for the April-June quarter, versus 52.4 billion yen a year ago. However, this was higher than an average forecast of 33.76 billion yen from seven analysts polled by Thomson Reuters I/B/E/S.

Sales in China, the world’s top auto market followed by the United States, was a bright spot for Mazda, rising 20 percent to 71,000 units, lifting the automaker’s global sales by 1 percent.

Sales in North America, Mazda’s largest market, slipped 6 percent to 106,000 units, with solid sales of its newly launched CX-5 compact crossover SUV doing little to offset sluggish sales of its Mazda 3 and Mazda 6 sedan models.

A slowdown in overall demand in the U.S. auto market, after years of growth following the global financial crisis, is delivering a knock to Mazda and many other global automakers.

Mazda reiterated its forecast for a 19 percent rise in operating profit in the year to March, as it expects a pick-up in sales of its larger models.

Reporting by Naomi Tajitsu; Editing by Himani Sarkar