By Kosaku Narioka
Nextage Co. shares fell sharply Tuesday morning after the Japanese retailer of used cars posted a 59% drop in its first-quarter net profit due to weakness in the used-car market and higher costs.
The company's shares were recently 8.2% lower at 2,562 yen after falling as much as 13% earlier.
Nextage said Monday after market close that net profit dropped to Y1.24 billion ($9.4 million) for the quarter ended Feb. 28 from Y3.03 billion during the same period a year earlier.
While the car retailer's first-quarter revenue rose 45% to Y117.94 billion, operating profit fell 60% to Y1.77 billion as various costs increased, including personnel, utility and promotion expenses.
Nextage also said the market for used cars in Japan has been deteriorating since new car sales started recovering in September.
The company maintained its earnings projections for the fiscal year ending in November. It continued to expect revenue to increase 20% to Y500.00 billion and net profit to drop 24% to Y17.20 billion.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
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April 04, 2023 at 08:44AM
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