Honda Reports Record First Half Profits, Raises Earnings Forecast for the Full Year

TOKYO October 27, 2004; The AP reported that Honda Motor Co. reported record fiscal first half profits Wednesday on strong sales in Asia and Europe, and raised its earnings forecast for the full year.

Japan's No. 3 automaker posted a 0.9 percent rise in net group profit for the six months ended Sept. 30 to 241.38 billion yen (US$2.3 billion; euro 1.7 billion) from 239.18 billion yen a year earlier. First half sales rose 3.5 percent to 4.167 trillion yen (US$39 billion; euro 31 billion) from 4.025 trillion yen.

Honda raised its profit outlook for the fiscal year ending March 31, 2005, to 447 billion yen (US$4 billion; euro 3.3 billion), from its forecast in July at 417 billion yen (US$3.9 billion; euro 3 billion). The forecast is about 4 percent below Honda's 464 billion yen net profit for the last fiscal year.

Honda said it now expects sales to total 8.69 trillion yen (US$81 billion; euro 64 billion), up 6.5 percent from 8.16 trillion yen the previous fiscal year. Honda had forecast sales of 8.56 trillion yen in July.

But Honda said a stronger Japanese yen pushed down its profits for the July-September quarter by 7.5 percent to 127.12 billion yen (US$1.2 billion; euro 1 billion), down from 137.36 billion yen the same quarter last year.

Group sales in the quarter grew 3.8 percent to 2.094 trillion yen (US$20 billion; euro 15 billion) from 2.017 trillion yen.

A strong yen tends to push down the earnings of exporters like Honda. The U.S. dollar cost about 110 yen in the quarter ended Sept. 30, while it was trading at nearly 118 yen a year ago.