Honda has raised its profit outlook as stronger sales in the US have helped it post a gain of 11% in quarterly operating profit (fiscal first quarter ended 30 June) to 299.3 billion yen, beating analyst estimates.
Consolidated sales revenue for the fiscal first quarter amounted to 4,024.1 billion yen, an increase of 8.4% compared to the same period last year, which related to changes in sales volume and model mix resulting from strong sales of automobiles in North America and motorcycles in Asian countries such as India and Vietnam, as well as a decrease in selling, general and administrative (SG&A) expenses. This was despite profit-reducing factors such as the impact of Mexico plant flooding and unfavourable foreign currency effects (strong yen).
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The company said it expects to post an operating profit of 710 billion yen in the year to March 2019 (previous guidance was 700 billion yen). A slightly weaker yen averaged for the year (2 yen/dollar lower than previous assessment) will help raise its bottom line over the previous projection, although the result would still be 16% down on the previous fiscal year's operating profit (833.5 billion yen).
Honda lowered its revenue forecast for the fiscal year as it shaved 75,000 vehicles off its sales projection for North America due to the impact of flood in Mexico. Honda cut its full-year revenue forecast to 15.45 trillion yen from 15.6 trillion yen. North American sales are now expected to be 1.94 million units, as opposed to the 2.015 million units predicted earlier.
