|HONDA REPORTS DROP IN PROFITS
January 31 2011.Honda Motor Co. has reported a 40% drop in net profit in the October to December 2010 period compared to the same period in 2009. The drop is blamed on the stregth of the yen and the lack of sales in the home market.
Honda's sales fell 5.8% to Y2.110 trillion in the three-month period, from Y2.241 trillion, while operating profit sagged 29% to Y125.65 billion from Y176.97 billion.
Honda Motor Co., Ltd. Reports Consolidated Financial Results for the Fiscal Third Quarter Ended December 31, 2010
TOKYO, Jan. 31, 2011
TOKYO, Jan. 31, 2011 /PRNewswire/ -- Honda Motor Co., Ltd. (NYSE: HMC) today announced its consolidated financial results for the fiscal third quarter ended December 31, 2010.
Nine Months Results
Honda's consolidated net income attributable to Honda Motor Co., Ltd. for the fiscal nine months ended December 31, 2010 totaled JPY 489.5 billion (USD 6,077 million), an increase of 149.5% from the same period last year. Basic net income attributable to Honda Motor Co., Ltd. per common share for the fiscal nine months amounted to JPY 270.82 (USD 3.32), an increase of JPY 162.68 from JPY 108.14 for the same period last year.
Consolidated operating income for the period totaled JPY 523.5 billion (USD 6,425 million), an increase of 95.6% from the same period last year, due primarily to increased sales volume and model mix, reduction in fixed costs per vehicle as a result of increased production and continuing cost reduction efforts, despite increased SG&A expenses and R&D expenses and the unfavorable foreign currency effects.
Consolidated revenue for the period amounted to JPY 6,723.7 billion (USD 82,511 million), an increase of 6.7% from the same period last year, primarily due to increased revenue in the automobile business and the motorcycle business, despite the unfavorable currency translation effects. Honda estimates that if calculated at the same exchange rate as the corresponding period last year, revenue for the period would have increased by approximately 10.6%.
-United States dollar amounts have been translated from yen solely for the convenience of the reader at the rate of JPY 81.49=U.S.$1, the mean of the telegraphic transfer selling exchange rate and the telegraphic transfer buying exchange rate prevailing on the Tokyo foreign exchange market on December 31, 2010.
With respect to Honda's sales by business segment, unit sales of motorcycles totaled 8 million 511 thousand units, an increase of 20.9% from the same period last year. Unit sales in Japan totaled 138 thousand units, an increase of 5.3% from the same period last year. Outside of Japan, total unit sales was 8 million 373 thousand units, an increase of 21.2% from the same period last year *, due mainly to increased unit sales in Asia and Other Regions including South America.
*Of the net sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, those with respect to which parts for manufacturing were not supplied from Honda or its subsidiaries are not included in net sales and other operating revenue, in conformity with U.S. generally accepted accounting principles. Accordingly, these unit sales are not included in the financial results. Sales of such products amounted to approximately 5,480 thousand units for the period.
Honda's automobile unit sales totaled 2 million 652 thousand units, an increase of 5.3% from the same period last year. In Japan, unit sales totaled 440 thousand units, a decrease of 5.0% compared to the same period last year**. Unit sales outside of Japan totaled to 2 million 212 thousand units, an increase of 7.6%, due mainly to increased unit sales in North America and Asia, despite decreased unit sales in Europe.
**Certain sales of automobiles that are financed with residual value type auto loans by our domestic finance subsidiaries are accounted for as operating leases in conformity with U.S. generally accepted accounting principles. As a result, they are not included in total sales of our automobile segment or in our measure of unit sales.
Honda's power product unit sales totaled 3,763 thousand units, an increase of 20.9% from the same period last year. In Japan, unit sales totaled 284 thousand units, an increase of 29.1% from the same period last year. Unit sales outside of Japan increased 20.3%, to 3,479 thousand units, due primarily to an increase in unit sales in all the regions.
Forecasts for the Fiscal Year Ending March 31, 2011
In regard to the forecasts of the financial results for the fiscal year ending March 31, 2011, Honda projects consolidated results to be as shown below:
The forecasts are based on the assumption that the average exchange rates for the Japanese yen to the U.S. dollar and the Euro will be JPY 85 and JPY 112, respectively, for the fiscal year ending March 31, 2011.