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Mitsubishi Motors erases operating loss Thu Feb 9, 2006 1:34 PM GMT163 By Chang-Ran Kim, Asia auto correspondent TOKYO (Reuters) - Mitsubishi Motors Corp.'s operations turned profitable for the first time in 11 quarters, thanks to cost cuts and a softer yen, the company said on Thursday, although sales disappointed in the crucial U.S. and Chinese markets. MMC, which came under the consolidated accounts of sister company Mitsubishi Heavy Industries in December, said October-December operating profit totalled 1.62 billion yen (7.8 million pounds) versus a loss of 9.97 billion yen a year earlier, putting it within reach of its unchanged full-year forecasts. At the net level, it posted a loss of 4.35 billion yen in the third quarter, narrowing the loss from 49.44 billion yen. For the full year to March 31, Japan's only unprofitable car maker kept its projection for a net loss of 64 billion yen and an operating loss of 14 billion yen but said it hoped to do better, fuelled by sales of newly launched vehicles. "We're expecting to boost revenue quite a bit in the (current) fourth quarter and translate that into profits," said Hiizu Ichikawa, managing director in charge of finances at MMC. "The latest results put us well within range of our full-year forecasts," he told reporters. "We want to exceed those numbers as much as possible." Global retail sales during the three months grew 6.9 percent to 326,000 units thanks to solid growth in Europe, Japan, the Middle East and Latin America. But a mere 2.6 percent rise in U.S. sales from rock-bottom levels a year earlier dealt a blow to revenue, which fell 1.6 percent to 538.35 billion yen during the three months. The end of a deal to supply vehicles for former shareholder DaimlerChrysler's Chrysler brand also hit revenues, MMC said. "High gasoline prices and a shift in market preferences had an impact, and sales (in the United States) were slower to recover than we had anticipated," Ichikawa said. Last year, MMC launched the Eclipse sports coupe and Raider pickup truck as many consumers shifted to more fuel-efficient vehicles such as small sedans and crossovers. A healthy North American operation -- a cash cow for most of its domestic competitors -- is crucial for MMC to nurse its overall business back to health, and executives are counting on more new products, including the Outlander SUV, to drive U.S. sales up in 2006. MMC also counts China and Taiwan among its most strategically important markets. But combined sales there fell about 20,000 units short of expectations in the business year to date, Ichikawa said.