Subaru Corp. said its operating profit rose 12.9% to 115.96 billion yen in the six months to September, as a weaker yen and a sharp drop in warranty repair costs more than offset an 11% fall in shipments to the U.S., its largest market. Revenue rose 5.4% to 2.51 trillion yen, the company said in results released Tuesday.

The numbers matter for investors in Asia because Subaru is among the Japanese carmakers most exposed to U.S. tariffs: in the first half it built 238,000 of its 424,000 vehicles in Japan, and 347,000 of its 444,000 sales were in the U.S. and Canada. The company kept its full-year forecast of 150 billion yen in operating profit, nearly four times the 40.1 billion yen it earned in the year to March 2026, but its own figures show that a large part of the first-half gain came from factors it does not expect to repeat.

Subaru's profit got a 57 billion yen lift from one-off factors

Chief Financial Officer Shinsuke Toda told analysts that three items added a combined 57 billion yen to first-half operating profit. A weaker yen contributed 18 billion yen, since the dollar averaged 159 yen against the 155 yen the company had assumed. Lower warranty repair costs added 25 billion yen, and 14 billion yen of expenses were pushed into the second half.

Compared with a year earlier, warranty claims improved profit by 57.6 billion yen. Toda said this reflected the absence of extra provisions booked in the prior year and a review of provisions for older recall cases. Currency moves added 61.4 billion yen, while higher raw material costs and tougher market conditions cut 51.7 billion yen.

The sales side was weaker. Lower volumes and higher U.S. incentives reduced profit by 46.9 billion yen, even though better pricing and mix, including 92.9 billion yen from a smaller U.S. tariff hit, helped. Toda attributed the higher incentives to stiffer competition and rising interest rates in the U.S. Fixed costs for launching new models cut another 24.4 billion yen. A year earlier, the company said U.S. tariffs had reduced its first-half operating profit by 154.4 billion yen, according to Car Watch.

Net profit attributable to shareholders rose 12.9% to 102.13 billion yen. The second quarter alone was much stronger than the first: operating profit for July to September was 73.4 billion yen, up from 26.3 billion yen a year earlier.

U.S. shipments fell 11% as Subaru rebuilt its Japan lines

Consolidated unit sales fell 6.1% to 444,000 vehicles. U.S. shipments dropped 11.1% to 302,000, while Canada rose 34.3% to 45,000 and Australia fell 12.8% to 18,000, according to the company's reference data. Global production fell 6.4% to 424,000 units, with output in Japan down 14% and output in the U.S. up 5.7%.

Subaru said the comparison was distorted. In the year-earlier period it had shipped extra cars to U.S. dealers ahead of tariff changes and built up inventory before renovation work at its Yajima plant in Gunma. In the latest half, one line at Yajima ran on a single shift and built only battery-electric vehicles until mixed production of electric and gasoline models began in late August. Toda said U.S. retail sales were above the prior-year level and that Canadian retail sales hit a first-half record.

At home, Subaru's domestic unit sales fell 3.8% to 50,000, in a Japanese market where new vehicle sales have been soft. Its aerospace unit lifted revenue 27.9% to 76.1 billion yen, though operating profit there slipped to 1.6 billion yen.

A heavier second half for Subaru

To reach 150 billion yen, Subaru needs about 34 billion yen of operating profit in the second half, well below the first half's pace. But the company said raw material costs and market conditions will weigh more in the October to March period, and the 14 billion yen of deferred costs will land then. It also plans to sell 496,000 vehicles in the second half, 52,000 more than in the first, for a full-year total of 940,000 units, up 4.9%.

The forecast assumes 155 yen to the dollar for the full year, while the first half averaged 159 yen. A continued weak yen would give the company room. Honda, which reported on the same day, raised its own profit forecast on stronger U.S. hybrid demand; Subaru made no change to its outlook.

The company also kept its dividend plan of 116 yen per share for the year, including an interim payout of 58 yen to be paid Dec. 10. Of the share buyback of up to 150 billion yen announced with its results for the year to March 2026, about 67 billion yen had been carried out by Oct. 31. Subaru said it will keep buying through March 16, 2027, and cancel all repurchased shares on March 23. It plans to file its semi-annual securities report on Nov. 12.