Honda profits more than double on weak yen, strong sales
The company logo shines on a new Honda vehicle on Sunday, Nov. 1, 2009.
Yuri Kageyama, The Associated Press
Published Friday, April 25, 2014 9:19AM EDT
TOKYO -- Honda said Friday that its profit for the fiscal fourth quarter zoomed to more than double the previous year's as the benefits of a weak yen added to strong sales, but momentum was forecast to ebb as the currency perk wears off.
January-March net profit totalled 170.5 billion yen ($1.67 billion), up from 75.7 billion yen the same period the previous year, the automaker said. Quarterly sales surged 13 per cent to 3.1 trillion yen ($30 billion).
Honda Motor Co. sold nearly 1.2 million vehicles worldwide during the quarter, helped by purchases by Japanese seeking to beat a sales-tax rise on April 1, up from slightly more than 1 million the same period a year earlier.
The Tokyo-based maker of the Odyssey minivan and Accord sedan expects to sell 4.83 million vehicles globally for the fiscal year ending March 2015. It sold 4.3 million vehicles for the fiscal year ended March 2014.
Honda also makes the Asimo walking, talking human-shaped robot that impressed President Barack Obama during his visit to Tokyo this week.
Honda is forecasting a 4 per cent rise in annual profit to 595 billion yen ($5.8 billion).
For the fiscal year just ended, Honda racked up a 574 billion yen ($5.6 billion) profit, up dramatically from 367 billion yen recorded a year earlier, but slightly below the company's more ambitious target given in January for a 580 billion yen ($5.7 billion) profit.
Honda said a temporary shutdown of its Alabama auto plant because of severe winter weather, a slowdown in the Thai market and costs related to recalls in Japan dented profits.
All the major Japanese automakers are expected to report hefty earnings, reflecting the big boost from a weak yen, but their profit projections will underline a momentum loss because the exchange rate effect will diminish over time.
Although the dollar soared to about 100 yen for the past fiscal year from about 80 yen the fiscal year before that, it's unlikely to keep rising at that pace, to 120 yen, for instance.
Honda is expecting the dollar to continue to cost about 100 yen this fiscal year, too.
Toyota Motor Corp., the world's top-selling automaker, reports earnings results May 8. Nissan Motor Co., allied with Renault SA of France, releases results May 12.
Separately, Mazda Motor Corp. reported a nearly seven-fold rise in January-March profit to 58.3 billion yen ($572 million).
Hiroshima-based Mazda tends to benefit from a favourable exchange rate even more than other Japanese automakers do because it relies heavily on exports.
Mazda is expecting an 18 per cent rise in profit for the fiscal year, at 160 billion yen ($1.6 billion).