Honda Profit Falls, Forecasts Worse Year
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Honda Profit Falls, Forecasts Worse Year from yahoo
Honda Profit Falls, Forecasts Worse Year
TOKYO (Reuters) - Honda Motor Co said on Tuesday its annual operating profit fell 17 percent as domestic sales flagged, and it forecast a tough year ahead after it was overtaken as Japan's second-largest car maker.
Honda forecast a 6.7 percent fall in operating profit to 560 billion yen ($5.15 billion) for this business year even as the launch of new, high-profit models such as the Odyssey minivan are expected to spur a recovery in domestic sales.
The forecast fell far short of analysts estimates of a 615 billion yen operating profit, according to Reuters Research.
The results came a day after rival Nissan Motor Co reported a 12 percent jump in annual operating profit. With sales exceeding three million units last business year, Nissan zoomed past Honda to take second place among Japan's car makers. Honda sold 2.983 million cars last year.
Japan's top auto maker, Toyota Motor Corp, is also expected to rake in record profits for the just-ended business year when it reports next month, having attacked every major market with new products amid cutthroat competition.
While Honda is expected to have a better year at home after a dismal showing last year, analysts said a slowdown in North American sales was a concern, since the region is estimated to account for around four-fifths of its operating profit.
That ratio compares with around 57 percent for Toyota and 71 percent for Nissan, according to JP Morgan's estimates, making Honda most vulnerable to a softer dollar.
After expanding its U.S. market share to 8.1 percent in 2003, Honda is expected to lag its Japanese rivals this year due to a lack of pickup trucks -- a traditional stronghold of the U.S. "Big Three" which Toyota and Nissan have been attacking.
Honda has responded by planning its own version of a pickup truck which it calls a sport utility vehicle (SUV), but that will only go into production in 2005.
Still, Honda leads most auto makers in the red-hot Asian market, where it has expanded successfully on strong brand recognition cultivated through its motorcycle business.
Honda, the world's top motorcycle maker, said operating profit was 600.14 billion yen ($5.52 billion) in the year ended on March 31, compared with analysts' consensus estimate of 630 billion yen.
But net profit grew by 8.8 percent to 464.34 billion yen, thanks partly to robust earnings in China, which are not counted at the operating level. Sales grew 2.4 percent to 8.16 trillion yen.
Shares in Honda gained 20 percent during the 12-month period, underperforming a more than 40 percent rise in both the market's transport sector subindex ITEQP.and the benchmark Nikkei average N225.
Honda shares ended down 1.91 percent at 4,610 yen on Tuesday, compared with a 0.98 percent fall in the Nikkei.
Honda Profit Falls, Forecasts Worse Year
TOKYO (Reuters) - Honda Motor Co said on Tuesday its annual operating profit fell 17 percent as domestic sales flagged, and it forecast a tough year ahead after it was overtaken as Japan's second-largest car maker.
Honda forecast a 6.7 percent fall in operating profit to 560 billion yen ($5.15 billion) for this business year even as the launch of new, high-profit models such as the Odyssey minivan are expected to spur a recovery in domestic sales.
The forecast fell far short of analysts estimates of a 615 billion yen operating profit, according to Reuters Research.
The results came a day after rival Nissan Motor Co reported a 12 percent jump in annual operating profit. With sales exceeding three million units last business year, Nissan zoomed past Honda to take second place among Japan's car makers. Honda sold 2.983 million cars last year.
Japan's top auto maker, Toyota Motor Corp, is also expected to rake in record profits for the just-ended business year when it reports next month, having attacked every major market with new products amid cutthroat competition.
While Honda is expected to have a better year at home after a dismal showing last year, analysts said a slowdown in North American sales was a concern, since the region is estimated to account for around four-fifths of its operating profit.
That ratio compares with around 57 percent for Toyota and 71 percent for Nissan, according to JP Morgan's estimates, making Honda most vulnerable to a softer dollar.
After expanding its U.S. market share to 8.1 percent in 2003, Honda is expected to lag its Japanese rivals this year due to a lack of pickup trucks -- a traditional stronghold of the U.S. "Big Three" which Toyota and Nissan have been attacking.
Honda has responded by planning its own version of a pickup truck which it calls a sport utility vehicle (SUV), but that will only go into production in 2005.
Still, Honda leads most auto makers in the red-hot Asian market, where it has expanded successfully on strong brand recognition cultivated through its motorcycle business.
Honda, the world's top motorcycle maker, said operating profit was 600.14 billion yen ($5.52 billion) in the year ended on March 31, compared with analysts' consensus estimate of 630 billion yen.
But net profit grew by 8.8 percent to 464.34 billion yen, thanks partly to robust earnings in China, which are not counted at the operating level. Sales grew 2.4 percent to 8.16 trillion yen.
Shares in Honda gained 20 percent during the 12-month period, underperforming a more than 40 percent rise in both the market's transport sector subindex ITEQP.and the benchmark Nikkei average N225.
Honda shares ended down 1.91 percent at 4,610 yen on Tuesday, compared with a 0.98 percent fall in the Nikkei.
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Rep Power: 0 What did they expect? Pumping out the same 127HP/115HP for an EX/LX/DX is not very appealing when compared to other econo-boxes out there. Honda needs to step it up, drop DOHC's into Si's/EX's/LX's/DX's all around. I'm almost 99% positive that even with a DOHC, they can still manage to pump out 35mpg out of such an engine. So what's the problem?
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honda is taking shiets for granted. now the other automakers are booming because they are stepping up a notch on their cars. now honda's customers are switching. its a general rule, consumers wanna get what they pay for, not pay alot and don't get shiet (HONDA).
when you think about it, there really isn't anything good for HONDA but reliability.
when you think about it, there really isn't anything good for HONDA but reliability.
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From: Poco, B.C. Canada
Rep Power: 565 Originally posted by 02 silver si
I bet the SI's did not help them out. I love my SI but it is not a car for everyone. With a lot of parts being one car specific that could not have help either.
I bet the SI's did not help them out. I love my SI but it is not a car for everyone. With a lot of parts being one car specific that could not have help either.
This will probably spell out improvements for the Civic specifically I think (hope).
Bring back double wishbone and DOHC for the EX with 4 wheel disc brakes!
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