TOKYO (AP) -- Mitsubishi Motors Corp. reported a quarterly loss Wednesday and said its annual result will plunge into the red for the first time in three years, hit by plummeting global demand and a rising yen.
Japan's fourth-largest automaker said its group net loss will amount to 60 billion yen ($670 million) in the fiscal year through March 2009. The company had earlier projected a net profit of 20 billion yen.
Mitsubishi said sinking demand amid a deepening global downturn and a rising yen were to blame for the dismal forecast, describing the October-December quarter as an "extremely hostile operating climate." A strong yen hurts Japanese exporters by eroding their overseas income. Over 80 percent of Mitsubishi's revenue comes from sales abroad.
"The turmoil in financial markets that was triggered by the failure of financial institutions in the United States in September accelerated a slowdown in the global economy at a speed and to a depth not seen before," the Tokyo-based automaker said.
The company posted a loss for the fiscal third quarter of 17.6 billion yen, against a net profit of 27.3 billion yen a year earlier. Revenue dropped 30 percent year-on-year to 444.1 billion yen, while its operating loss totaled 5.5 billion yen from 33.2 billion yen in profit.
Like other Japanese automakers, Mitsubishi faces a deep slump at home and abroad that has forced them to cut jobs, production and earnings outlooks. The company downgraded its fiscal year global sales target by 15 percent and now expects to sell 1.05 million vehicles.
President Osamu Masuko was somber as he described the company's health.
"I mentioned last summer that the financial turmoil posed a major risk for us," he told reporters. "But the situation we find ourselves in right now is far worse than I ever expected."
The company will enact a series of emergency measures to reduce costs and adjust inventories, Masuko said.
On top of steep production cuts, Mitsubishi will cut executive pay by up to 40 percent starting March, scale back participation in motor shows and withdraw from the Dakar Rally and other off-road races.
It is also canceling or postponing major capital expenditures. The company said it will postpone opening a new SUV plant in Russia and has scrapped plans to upgrade its engine production capacity.
In trading Wednesday, shares in Mitsubishi Motors rose 2.6 percent to 117 yen.