Honda Motorcycle Sales Boost Quarterly Net Profit

Press release

Published August 1st, 2017 - 11:31 GMT

Honda boosted its net profit forecast to 545 billion yen from an earlier figure of 530 billion yen for the fiscal year ending March 2018.

Japanese vehicle maker Honda on Tuesday said net profit for the second quarter rose by double digits boosted by strong motorcycle sales, revising up its full-year forecast.

The Tokyo-based company said "solid sales of two-wheel vehicles in Asia and cost reduction efforts" contributed to increased profits.

Motorcycle sales volume grew in India and Vietnam, Honda said, while four-wheel vehicle sales volume increased in Japan and China but declined in North America.

Japan's number-three automaker booked net profit of 207.3 billion yen ($1.88 billion) in the April-June period, up 18.7 percent from the previous year.

Sales grew 7.0 percent to 3.71 trillion yen, while operating profit rose 0.9 percent to 269.2 billion yen.

Honda boosted its net profit forecast to 545 billion yen from an earlier figure of 530 billion yen for the fiscal year ending March 2018.

It also lifted its fiscal year operating profit and revenue outlooks.

"Honda's profit pales compared to figures last year when it booked a one-time gain in a pension accounting change," Satoru Takada, an analyst at TIW, a Tokyo-based research and consulting institute, said ahead of the earnings release.

"But it displayed a good performance in China and Indonesia while showing steady sales in North America," he said.

While North American vehicle sales declined in the quarter year on year to 481,000 from 510,000, revenue rose slightly to 2.13 trillion yen from 2.06 trillion yen.

Takada added that the foreign exchange situation is "a key factor" for automakers.

"Current levels are relatively positive for the Japanese auto industry," he said.

Although the yen has strengthened slightly in past days, it remains weak against the dollar over recent years.

A stronger Japanese yen can hurt carmakers by eroding the value of overseas profits when repatriated.

On Thursday, Nissan reported a drop in quarterly net profit, hit by higher costs and weak sales in key markets, although it left its annual forecasts unchanged.

Toyota will release earnings on Friday.

Source: AFP

Background Information

Honda

Honda delivers to customers in over 150 countries and regions, over 6 million power products annually, spanning its general-purpose engines, and products powered by them, including tillers, generators, snow blowers to lawnmowers, pumps and outboard engines. Honda is also developing and producing electrified products useful in many facets of life, delivering new value such as the Miimo robotic lawnmower, and the LiB-AID E500 new era portable power source. Honda also lease-sells to businesses the Honda Walking Assist Device, an assistive device for use in the training of walking based on the theory of human walking amassed through Honda’s robotics research.