Despite sales revenues taking a hit from adverse currency exchange rates, Honda Motor net income for the fiscal third quarter ended December 31, 2003 was up 31.2% to Y151.0 billion ($US1,410 million), compared with the same period in 2002. Honda did however report a drop in operating profit for the fiscal nine-month period.

Net income per share for the quarter amounted to Y158.66 ($1.48), compared with Y118.63 in 2002.

Unit sales in all of Honda's operations - motorcycles, cars and SUVs, and power products, increased during the third quarter but net sales and other operating revenue was Y1,992.2 billion ($18,597 million), unchanged from 2002.

Honda said currency conversions had a negative impact on foreign revenue from overseas subsidiaries changed into yen. Had the exchange rate of yen remained unchanged from the same period in 2002, revenue for the quarter would have increased by approximately 6.3%.

Third quarter operating income was up 1.4% to Y161.1 billion ($1,504 million), primarily due to increased profit coming from higher revenue and Honda's ongoing cost reduction, offsetting negative impacts, such as appreciation of the yen and increase in research and development (R&D) expenses.

Income before taxes for the quarter totaled Y203.5 billion ($1,900 million), an increase of 28.3% from 2002.

Nine-Month Results

Honda's consolidated net income for the fiscal nine months was up 25.9% while income per share was Y407.87($3.81), compared with Y318.59 a year ago.

Nine-month revenue was up 3% to Y6,017.6 billion ($56,172 million). Honda estimated that if the yen exchange rate had not changed, revenue would have increased by approximately 6.7%.

Nine-month operating income for the fiscal nine months fell 4.1% to Y463.0 billion ($4,322 million) due to negative impacts, such as appreciation of the yen, an increase in selling, general and administrative (SG&A) expenses and research and development (R&D) expenses, which offset increased profit from higher revenue and continuing cost reduction.

Income before taxes was up 23.8% to Y535.4 billion ($4,998 million).

Motorcycle unit sales increased 9.5% to 6,586,000 units but revenue decreased 1.9% to Y701.4 billion ($6,548 million) due mainly to yen appreciation. Operating income also decreased 58.9% to Y15.6 billion ($146 million).

Honda car and SUV sales for the fiscal nine months increased 3.9% to 2,190,000 units. Unit sales in Japan decreased 19.4% to 506,000 while overseas sales increased 13.8% to 1,684,000. Revenue also increased 3.6% to Y4,897.7 billion ($45,718 million), due to an increase in overseas sales, which offset the negative yen impact. Operating income decreased 1.3% to Y385.5 billion ($3,599 million).

Financial services revenue - rival Ford and GM's saviour of late - increased 4.1% to Y187.2 billion ($1,748 million) while operating income increased 14.2% to Y55.6 billion ($520 million).

Overall, sales revenue decreased 2.6% to Y2,849.3 billion ($26,597 million), due mainly to decreased unit sales in motorcycle and car businesses. Operating income decreased 29.5% to Y108.1 billion ($1,010 million).

In North America, revenue increased 2.7% to Y3,552.7 billion ($33,163 million), due to strong sales in the car and power product businesses, which offset the negative impact of yen appreciation. Operating income decreased 2% to Y270.4 billion ($2,525 million).

Both revenue and operating income in Europe for the fiscal nine months increased by 17.9% to Y658.4 billion ($6,146 million), and 405.7% to Y18.8 billion ($176 million), respectively. This increase was due mainly to increased unit sales in the car business, as well as a positive impact of currency movements.

In Asia, due to continued strong motorcycle and car sales, revenue increased by 35.1% to Y499.3 billion ($4,662 million). Operating income also increased 14.7% to Y35.0 billion ($328 million).

Revenue from other regions for the fiscal nine months increased 21.9% to Y255.0 billion ($2,381 million), due mainly to increased sales in all three business sectors, which offset the negative impact of currency translation effects. Operating income decreased 5.6% to Y19.4 billion ($181 million).