Honda raises profit outlook on speedy recovery
Source: Agencies |
August 2, 2011, Tuesday
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Print Edition
Print Edition
HONDA Motor Co reported an unexpected quarterly profit and raised its annual outlook by more than a third, as Japan's No.3 automaker rebounded quickly from a severe parts shortage caused by the March 11 earthquake.
Honda reported a 90 percent fall in first quarter net profit yesterday, versus expectations of a loss, after it suffered the biggest production drop by any car maker from the March disaster, due mainly to bad timing for the scheduled delivery of parts.
The supply shortage coincided with the full remodeling this spring of its Civic model in the key US market, where sales of the popular car fell by a third in June.
While its recovery schedule still lags that of rivals, Honda now expects to produce more in July-September than it had outlined in June as the supply bottleneck eased. It raised its annual sales forecast by 135,000 vehicles to 3.435 million vehicles.
"I think Honda deserves some credit for the first quarter, which some expected to be in the red," said Naoki Fujiwara, a fund manager at Shinkin Asset Management.
In April-June, Honda made an operating profit of 22.58 billion yen (US$292.5 million), better than the average estimate of a loss of 67 billion yen according to seven analysts polled by Thomson Reuters.
The results were boosted by a 43 percent jump in profits from its motorcycle operations and stronger-than-expected earnings at its finance business, the maker of Civic and Accord cars said.
First quarter net profit, which includes earnings from China, was 31.8 billion yen, down 88 percent, while revenue fell 27 percent to 1.715 trillion yen.
Honda's Japanese car production halved in June from the previous year, even as Nissan Motor Co eked out a rise and the decline at Toyota Motor Corp shrank to 16 percent from 78 percent in April.
Top automaker Toyota will report its quarterly earnings today, with a 190 billion yen loss estimated.
Honda reported a 90 percent fall in first quarter net profit yesterday, versus expectations of a loss, after it suffered the biggest production drop by any car maker from the March disaster, due mainly to bad timing for the scheduled delivery of parts.
The supply shortage coincided with the full remodeling this spring of its Civic model in the key US market, where sales of the popular car fell by a third in June.
While its recovery schedule still lags that of rivals, Honda now expects to produce more in July-September than it had outlined in June as the supply bottleneck eased. It raised its annual sales forecast by 135,000 vehicles to 3.435 million vehicles.
"I think Honda deserves some credit for the first quarter, which some expected to be in the red," said Naoki Fujiwara, a fund manager at Shinkin Asset Management.
In April-June, Honda made an operating profit of 22.58 billion yen (US$292.5 million), better than the average estimate of a loss of 67 billion yen according to seven analysts polled by Thomson Reuters.
The results were boosted by a 43 percent jump in profits from its motorcycle operations and stronger-than-expected earnings at its finance business, the maker of Civic and Accord cars said.
First quarter net profit, which includes earnings from China, was 31.8 billion yen, down 88 percent, while revenue fell 27 percent to 1.715 trillion yen.
Honda's Japanese car production halved in June from the previous year, even as Nissan Motor Co eked out a rise and the decline at Toyota Motor Corp shrank to 16 percent from 78 percent in April.
Top automaker Toyota will report its quarterly earnings today, with a 190 billion yen loss estimated.
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