(Recasts with new forecast figures)
TOKYO, Oct 31 (Reuters) - Mazda Motor Corp, Japan's fifth-largest automaker, raised its profit estimates for the first half and the full year through next March on Thursday, citing cost cuts and a weaker yen.
The automaker, one-third owned by Ford Motor Co , now expects group net profit for the April to September period to come in at 5.5 billion yen ($44.74 million), compared with a May forecast of two billion yen.
Operating profit is expected to be 14.6 billion yen, up 3.6 billion yen from the previous projection.
"We had better results than we initially projected and that's a function of working closely with our suppliers to reduce material costs," Gideon Wolthers, managing executive officer, told a news conference.
Mazda is due to announce first-half results on November 12.
Due to the rosier first-half estimates, Mazda also lifted its group net profit forecast for the full year to March to 26.5 billion yen from 20 billion yen.
Also driving the better forecasts was an expected seven percent rise in full-year vehicle sales worldwide, to 1.015 million units from a previous estimate of 1.001 million units.
"With new products such as the Atenza/Mazda6 and new Demio now reaching the markets, we are firmly on course," Mazda President Lewis Booth said in a statement.
Full-year revenues are now expected to rise 11.7 percent to 2.34 trillion yen, which is up from a previous forecast of 2.25 trillion yen.
But Mazda slightly lowered its full-year operating profit forecast to 50 billion yen from 51 billion yen, although the new figure would still represent a rise of 75 percent from last year.
"We are achieving sustainable, profitable growth, although we are seeing increased pressure on our net revenue. Looking ahead, we must continue to achieve our cost reduction targets as we did in the first half," Booth said.
Mazda said that although it was selling more cars in the United States than it originally expected, increased volumes were not translating into higher revenues because its sales incentives had risen by $400 to $500 from last year's levels to over $2,000 per vehicle.
And at home, Mazda lowered its sales outlook for the year to March to 300,000 units from 319,000.
But Mazda said it would strengthen its domestic dealership network by combining 34 dealers across Japan into 11, a move it said would help reduce inventories and boost efficiency.
The automaker also said it expects group interest-bearing debt to total 672.7 billion yen in March 2003, or 38.1 billion less than originally forecast.
The revisions came after rivals Toyota Motor Corp , Honda Motor Co Ltd and Nissan Motor Co Ltd all unveiled record-setting first-half earnings results this month.
After spending much of the 1990s in the red, Mazda managed to return to profit last year with the help of Ford, which led it through six years of restructuring.
In the biggest turnaround in its 82-year history, Mazda in May reported group net profit of 8.83 billion yen for the year ended in March 2002, helped by cost cuts and a favourably weak yen, after the previous year's loss of 155.24 billion yen.
Investors cheered the revision announcement, sending Mazda's shares up 3.4 percent to 275 yen by the end of morning trade, outperforming its main rivals including Toyota, which announced rosy half-year earnings and full-year forecasts the previous day.
The key Nikkei average ended the morning down 1.1 percent. ($1=122.93 yen)