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Honda’s 1Q profits increase 30 percent – August 14, 2006

August 14, 2006
Filed under Features

Japan’s Honda Motor Co., Ltd. said its fiscal first-quarter profit increased 30 percent on strong vehicle sales in North America and a depreciation of the Japanese yen.
Honda’s net income for the three months ended June 30 was 143.4 billion yen ($1.23 billion), or 78.5 yen per share, up from 110.7 billion yen, or 59.9 yen, during the same period in 2005.
First-quarter sales were 2.59 trillion yen ($22.3 billion), up nearly 15 percent from 2.26 trillion yen for last year’s first quarter. Operating income was 203.5 billion yen ($1.77 billion), up 19.4 percent.
By business segment, Honda’s first-quarter motorcycle business accounted for sales of 310.1 billion yen ($2.7 billion).
Honda sold 2.38 million motorcycles worldwide during the first quarter, a decrease of 201,000 units or 7.8 percent from the corresponding period in 2005. Sales outside of Japan totaled 2.29 million units, also a decrease of 7.8 percent.
The company’s first-quarter motorcycle sales in the United States totaled 89,000 units, up 4,000 units compared to the same three months in 2005; sales in Japan totaled 89,000 units, down 6,000 units from the comparable period last year; sales in Europe totaled 105,000 units, down 11,000 units; sales in Asia totaled 1,809,000, down 290,000 units because of decreased sales of component parts in Indonesia; and sales in other regions totaled 288,000 units, up 102,000 units compared to the first quarter of 2005.
Honda said a decrease in cycle sales in Indonesia offset healthy unit sales in Latin America.
A total of 896,000 automobiles were sold during the first quarter, up 6.7 percent from the corresponding period in 2005. Excluding sales in Japan, unit sales increased 10 percent to 740,000 units, due mainly to the increased demand in North America.
In North America, Honda’s consolidated revenue was yen 1.47 trillion ($12.7 billion), up 17.6 percent from the corresponding period in 2005. Operating income increased by 57.4 percent to yen 114.4 billion ($993 million).
Honda said revenue increases in North America came from motorcycle, automobile, financial services, power products and other business, as well as currency translation effects. The company said operating income was up due primarily to increased profit attributable to higher revenue, a change in auto prices, decreased SG&A expenses and currency effects caused by the depreciation of the Japanese yen.

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