Reporting a 51 percent jump in third-quarter earnings, Fuji Heavy said it now expects operating profit of 410 billion yen ($3.48 billion) for the year through March, 7.3 percent more than the 382 billion yen it previously forecast. Operating profit a year earlier was 326.5 billion yen.
In the October-December quarter, operating profit climbed to 124.49 billion yen, handily beating an average estimate of 109.7 billion yen in a poll of 10 analysts by Thomson Reuters I/B/E/S.
Demand in the United States, where inventory and sales incentives have been low for years, has been so strong that Subaru, known for its all-wheel-drive cars, has been struggling to keep up.
That factor has helped counter tepid sales in China and the impact of a shrinking domestic market: Fuji Heavy lowered its full-year vehicle sales projections a fraction to 903,000, with stronger-than-expected sales in North America offsetting weakness in almost every other region.
Fuji Heavy also changed its yen-dollar exchange rate assumption, to 108 yen from 104 yen. The weaker yen provides a tailwind for the company since each sale in dollars translates into more of the Japanese currency.
Its heavy currency exposure and popularity in the United States have made Subaru one of the most profitable automakers in the world. Under its new forecasts, its profit margin is seen at 14.4 percent for the current fiscal year, compared with 5.6 percent for Honda Motor Co, which flagged lower profits last week.