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Tata Motors earnings up on Jaguar Land Rover
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Tata Motors earnings up on Jaguar Land Rover
By ERIKA KINETZ,AP Business Writer -
Saturday, February 27
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MUMBAI, India – Jaguar and Land Rover swung to profitability in the December quarter, driving India's Tata Motors to a consolidated quarterly profit of 6.5 billion rupees ($141 million), compared to a year-earlier loss of 26 billion rupees ($564 million), the company said Friday.
"It's finally starting to pay off for Tata Motors," said Chief Financial Officer C. Ramakrishnan.
Jaguar Land Rover posted an after-tax profit of 55 million pounds ($83.6 million) for the October-December quarter, following a 60 million pound ($91.2 million) loss in the prior quarter, thanks to aggressive cost cutting and an 18 percent pickup in retail sales.
Reviving sales in China, Europe, Russia and North America overcame falling volumes in Britain, the company said.
Tata bought Jaguar Land Rover from Ford for $2.3 billion in June 2008, not long before the global recession threw the auto industry into a deep tailspin.
Today, the troubled luxury brands account for just over half of Tata Motors' consolidated revenues, but high costs have weighed on profits and strained the company's debt burden.
Angel Broking analyst Vaishali Jajoo said it's too early to tell whether Tata will be vindicated for what critics called a pricey and ill-timed acquisition. Much still depends on how fast global car sales recover, and it's not entirely clear how much debt Tata Motors has on its books, she said.
But she said cost cutting and reviving sales have turned losses into profit faster than expected.
"Recovery is there," she said. "The worst is over."
Overall revenues at Tata Motors for the October-December quarter were 267.7 billion rupees ($5.8 billion), up 46.7 percent from the year-earlier period.
Tata Motors stock closed up 6.3 percent at 711 rupees ($15.42) a share on the Bombay Stock Exchange, while the benchmark Sensex index rose 1.08 percent.
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