JAPAN: Honda Q1 profits up, full-year forecasts down
Though it set first quarter records for income before taxes and net income, Honda Motor's results for the period ended 30 June, 2008 reflected the sales downturn in North America while the company's full-year profit forecasts are down substantially.
Consolidated net sales and other operating revenue fell 2.2% year on year to JPY 2,867.2bn "due to factors including the negative currency translation effect", the automaker said in Tokyo on Friday.
However, consolidated operating income of JPY 221.3bn was almost unchanged (-0.2%) due to reduced sales incentives in North America, increased profit from increased unit sales, and cost reductions, despite the negative effects of exchange rates and rising raw material costs and expenses.
Consolidated net income rose 8.1% to JPY 179.6bn.
Reuters noted the results was a surprise and ahead of an average estimate of JPY135.4bn yen in its poll of eight brokerages.
Honda directors proposed a JPY22-per-share Q1 dividend and expect to pay JPY88 for the full fiscal year.
Honda said its automobile and motorcycle businesses posted record Q1 unit sales.
Motorcycle sales rose 20.5% to 2.715m units due to increased sales in Asia and emerging markets like Brazil.
Automobile sales were up 1.7% to 962,000, again due to strong performance in those emerging markets.
Honda expects motorcycle sales to rise 12.2% to 10.455m units this year while automobile sales increase 3.9% to 4.08m.
It expects sales up 1.1% to 12.13 trillion yen, but operating income off 33.9% to JPY630bn and net income down 18.3% to JPY490bn.
Reuters said consensus forecasts from 18 brokerages called for an annual net profit of JPY531.1bn.