Wednesday, October 30, 2013
DJ: Honda's Net Profit Surges 46% In July-Sept
TOKYO--Honda Motor Co. (7267) on Wednesday reported a 46% rise in net profit in the fiscal second quarter, as the weak yen along with solid car sales in North America and Japan, and motorbike sales in Asia more than offset hefty spending on new factories in growth markets.
Japan's third biggest car maker by volume left unchanged its net and operating profit projections for the full year despite the solid result.
Honda posted a net profit of Y120.37 billion ($1.23 billion) in the three months ended September, up from Y82.23 billion in the same quarter a year earlier. The figure undershot a Y142.90 billion average forecast by eight analysts surveyed by Japanese financial information provider Quick.
The results come after several straight quarters of worse-than-expected results, as Honda ramped up investments in research and development, and sank money into opening new factories in emerging markets. Honda has said those new factories are a mainstay strategy for the company to hit its sales target of more than 6 million vehicles worldwide for the fiscal year ending March 2017. The company expects emerging markets to account for half the sales goal.
The earnings from Honda is the latest sign that the nation's car makers are bouncing back after a series of setbacks in recent years. Those setbacks include the record strength of the yen until last year, production disruptions stemming from the March 2011 earthquake in Japan and flooding in Thailand, and a sales plunge in China amid territorial disputes between Tokyo and Beijing.
Honda said its revenue grew to Y2.890 trillion from Y2.271 trillion the previous year in the July-September quarter, up 27%, while its operating profit rose to Y171.45 billion from Y100.8 billion, an increase of 70%.
The recovery in the country's mainstay industry bolsters Prime Minister Shinzo Abe's efforts to end decades of economic stagnation and to revive consumption through drastic monetary easing by the central bank and growth policies.
The solid results from Honda set the stage for upbeat reports from its peers in the coming week.
Honda reports earnings under U.S. accounting standards.