Honda Motor said yesterday its net profit for the three months ended December fell almost 40 percent from a year ago as the yen’s strength overshadowed cost-cutting efforts and as demand in Japan slowed.
The automaker posted a net profit of ￥81.1 billion (US$988 million) for the quarter, missing the average Nikkei forecast for a ￥93 billion net profit.
Sales fell 5.8 percent to ￥2.1 trillion in the three-month period. Honda said that if calculated at the same exchange rate as the corresponding period last year, net sales for the quarter would have decreased by approximately 0.8 percent.
Operating profit slumped 29 percent to ￥125.6 billion. Honda said the fall was “due primarily to the unfavorable currency translation effects and decreased sales in the automobile business in Japan.”
It warned that the economy of its domestic market was “at a standstill,” with the slow recovery of consumer spending and prolonged high unemployment still keeping demand at home weak. Auto demand eased in the period as government incentives to spur car buying expired.
Japan’s domestic vehicle production fell 5.1 percent to 747,947 units in December, the Japan Automobile Manufacturers Association said on its Web site yesterday. Exports rose 17 percent to 467,590 units in December, the association said.
Vehicle production gained 21.3 percent to 9.6 million vehicles last year, while exports gained 33.8 percent to 4.8 million units, it said.
However, Honda said it expected its full-year net profit to hit ￥530 billion, up 97.5 percent year-on-year, an upward revision from ￥500 billion forecast last October.
The automaker said net profit for the nine months ended December was ￥489.5 billion, up 149.5 percent from the same period last year.