U.S. demand for models like this Forester is so high that it may be exceeding Subaru's current production capacity. The company is expanding a factory in an effort to keep ahead of market demand. Image source: Fuji Heavy Industries.

Fuji Heavy Industries (FUJHY 0.44%), the parent company of automaker Subaru, reported earnings for the quarter ended Dec. 31 on Feb. 4. Here's what investors need to know.

The key numbers
Like many Japanese companies, Fuji Heavy uses a fiscal year end that begins on April 1. The quarter that ended on Dec. 31 was the third quarter of its 2016 fiscal year. 

Financial numbers are in billions of yen. Vehicles sold are rounded to the nearest thousand. 

 MetricQ3 16Q3 15Change
Revenue 817.1 750.5 9%
Vehicles sold 240,000 232,000 3.4%
Operating income 150.6 124.5 21%
Operating profit margin 18.4% 16.6% 1.8 points
Net income 144.6 77.4 87%
Yen per U.S. Dollar 122 105 17 more
Yen per euro 135 140 5 fewer

Fuji Heavy's operating profit of 150.6 billion yen ($1.28 billion) beat the consensus analyst estimate of 142.3 billion yen as reported by Thomson Reuters.

What happened at Fuji Heavy during the quarter
Fuji Heavy was once a defense contractor that specialized in military aircraft. It still has a small business building what it now calls "aerospace" components, but Subaru accounted for over 94% of the company's revenue through the first nine months of its fiscal 2016.

As Subaru goes, in other words, so goes Fuji Heavy. Happily, at the moment, Subaru is doing very well. The United States is far and away Subaru's largest market, and its sales here continue to be outstanding.

In fact, in the U.S., demand for Subarus has been so high that the company is investing $140 million in a major expansion of its sole U.S. factory. That's a big step for Fuji Heavy, as Subaru is a tiny automaker by global standards and CEO Yasuyuki Yoshinaga tends to be very careful with capital expenditures. That follows Fuji Heavy's decision to stop making Camrys for Toyota (TM -0.54%) at its Indiana plant because it needed the capacity for its own products. Toyota owns a small stake in Fuji Heavy, about 8.7%.

Subaru sold about 154,000 vehicles in the U.S. during the quarter. That's up 11.4% from the year-ago period, well ahead of the overall U.S. new-vehicle market's gain -- but they might have risen more had the company been able to build more vehicles. 

Demand is especially heavy for Subaru's Outback and Forester models, so much so that at current sales volumes, the company is probably bumping up against limits. Its planned expansion of its Indiana factory will add about 100,000 units of capacity a year when it's completed in 2017.

The story isn't quite as positive in other regions, but Subaru's sales volumes in the U.S. dwarf its results elsewhere. Subaru sold about 33,000 vehicles in Japan during the quarter, down about 3% from a year ago. It sold about 10,000 vehicles in both Europe and China -- a flat year-over-year result in the former, a decline of about 2,000 in the latter. And it sold about 21,000 vehicles in the rest of the world combined, up about 3,000 from a year ago.

But taken as a whole, Subaru is having a tremendous year. Through the first nine months of Fuji Heavy's fiscal 2016, its revenue, global sales, sales outside of Japan, and sales in North America were all at record levels.

Looking ahead
Fuji Heavy updated its guidance for the full fiscal year in December, and it stuck by that update in its report on Feb. 4. For the full year that will end on March 31, it expects to report operating income of 550 billion yen ($4.71 billion) on revenue of 3.21 trillion yen ($27.43 billion), and net income of 414 billion yen ($3.53 billion), assuming an average exchange rate over the period of 120 yen to the U.S. dollar.