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13844
Fri, 07/25/2008 - 21:51
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https://oananews.org//node/13844
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Honda's 1st qtr net profit up 8.1%, but cuts FY 2008 sales outlook
TOKYO, July 25 Kyodo - Honda Motor Co. said Friday its group net profit in the April-June quarter rose 8.1 percent from a year earlier to 179.61 billion yen as strong sales in emerging economy countries and smaller sales incentive costs in North America helped offset higher materials and fuel costs as well as a stronger yen.
But the nation's No. 2 automaker cut its sales and operating profit forecasts for the full fiscal 2008 ending next March by lowering its global auto sales target for the year as it is anticipating a tougher market environment going forward, including falling demand in the United States and higher materials costs.
''Prices of raw materials are likely to rise further and we think this will deal a significant blow to us,'' Honda Executive Vice President Koichi Kondo told reporters. He said steel and other materials costs are likely to increase by about 200 billion yen this fiscal year compared with the previous year.
Kondo said auto demand is falling in the United States, Honda's biggest market, as well as in Europe and Japan, and demand is shifting to energy-efficient models amid high gasoline prices.
Sales of sport utility vehicles and other large cars were ''very severe,'' but those of the Civic, the Fit and other compact cars were ''very robust,'' and their supplies ''ran short,'' he said.
To meet the change in demand among consumers, Honda plans to cut production of light trucks and other large vehicles by 50,000 units in North America and increase output for the Civic and other fuel efficient models by 25,000 units for the current business year.
Asked about the possibility of raising vehicle prices in Japan, Kondo said, ''When we introduce new models or revamped ones, their prices should reflect the higher costs of materials, but it's difficult for us to raise prices on existing models at the moment given current market conditions.''In a consolidated earnings report for the first quarter of the current business year, the automaker reported a pretax profit of 235.10 billion yen, up 7.7 percent. However, operating profit slipped 0.2 percent to 221.35 billion yen and sales fell 2.2 percent to 2.87 trillion yen.
The company's pretax and net profits were the highest ever for a first quarter.
In the reporting quarter, Honda sold 962,000 cars, up 16,000 units from a year earlier, as strong sales in Asia and Brazil worked to offset sales falls in North America, Europe and Japan.
Motorcycle sales rose by 462,000 units to 2,715,000 units in the same period also due to brisk demand in emerging countries.
For the full year, Honda cut its projected operating profit to 630 billion yen from a profit of 650 billion yen forecast in April, on projected sales of 12.13 trillion yen, down from an earlier forecast of 12.14 trillion yen. The new operating profit projection represents a 33.9 percent drop from fiscal 2007, while the revised sales represent an increase of 1.1 percent.
The automaker is projecting a net profit of 490 billion yen, down 18.3 percent year on year. It left its net profit forecast unchanged from April.
Honda lowered its annual global auto sales target to 4,080,000 units, down 60,000 units from its previous estimate announced in April.
Honda is the first to announce first quarter results among Japan's top three automakers. Toyota Motor Corp. and Nissan Motor Co. are scheduled to release their April-June results on Aug. 7 and Aug. 1, respectively.
But the nation's No. 2 automaker cut its sales and operating profit forecasts for the full fiscal 2008 ending next March by lowering its global auto sales target for the year as it is anticipating a tougher market environment going forward, including falling demand in the United States and higher materials costs.
''Prices of raw materials are likely to rise further and we think this will deal a significant blow to us,'' Honda Executive Vice President Koichi Kondo told reporters. He said steel and other materials costs are likely to increase by about 200 billion yen this fiscal year compared with the previous year.
Kondo said auto demand is falling in the United States, Honda's biggest market, as well as in Europe and Japan, and demand is shifting to energy-efficient models amid high gasoline prices.
Sales of sport utility vehicles and other large cars were ''very severe,'' but those of the Civic, the Fit and other compact cars were ''very robust,'' and their supplies ''ran short,'' he said.
To meet the change in demand among consumers, Honda plans to cut production of light trucks and other large vehicles by 50,000 units in North America and increase output for the Civic and other fuel efficient models by 25,000 units for the current business year.
Asked about the possibility of raising vehicle prices in Japan, Kondo said, ''When we introduce new models or revamped ones, their prices should reflect the higher costs of materials, but it's difficult for us to raise prices on existing models at the moment given current market conditions.''In a consolidated earnings report for the first quarter of the current business year, the automaker reported a pretax profit of 235.10 billion yen, up 7.7 percent. However, operating profit slipped 0.2 percent to 221.35 billion yen and sales fell 2.2 percent to 2.87 trillion yen.
The company's pretax and net profits were the highest ever for a first quarter.
In the reporting quarter, Honda sold 962,000 cars, up 16,000 units from a year earlier, as strong sales in Asia and Brazil worked to offset sales falls in North America, Europe and Japan.
Motorcycle sales rose by 462,000 units to 2,715,000 units in the same period also due to brisk demand in emerging countries.
For the full year, Honda cut its projected operating profit to 630 billion yen from a profit of 650 billion yen forecast in April, on projected sales of 12.13 trillion yen, down from an earlier forecast of 12.14 trillion yen. The new operating profit projection represents a 33.9 percent drop from fiscal 2007, while the revised sales represent an increase of 1.1 percent.
The automaker is projecting a net profit of 490 billion yen, down 18.3 percent year on year. It left its net profit forecast unchanged from April.
Honda lowered its annual global auto sales target to 4,080,000 units, down 60,000 units from its previous estimate announced in April.
Honda is the first to announce first quarter results among Japan's top three automakers. Toyota Motor Corp. and Nissan Motor Co. are scheduled to release their April-June results on Aug. 7 and Aug. 1, respectively.
