Honda Sales Up, Income Down
February 3, 2006
Filed under Uncategorized
Japan’s Honda Motor Co. Ltd. said consolidated net income for the fiscal nine months ended December 31, 2005, totaled JPY 377.5 billion ($3.197 billion), a decrease of 3.7% from the same period in 2004. Basic net income per Common Share for the fiscal nine months amounted to JPY 409.43 ($3.47), compared to JPY 418.99 for the same period in 2004.
Consolidated net sales and other operating revenue for the period was JPY 7,074.2 billion ($59.916 billion), up 12.3% compared to the same period in 2004.
Operating income for the fiscal nine months totaled JPY 528.0 billion ($4.473 billion), an increase of 7.6% over the same period in 2004. This was primarily due to positive currency effects caused by the depreciation of the Japanese yen, increased profit attributable to higher revenue and continuing cost reduction effects, which offset the negative impact of increased SG&A and R&D expenses.
Honda’s motorcycle unit sales during the first nine months of the company’s business year totaled 7.858 million units, up 1.2% from the same period in 2004. Total overseas unit sales numbered 7.583 million units, up 1.4% from the same period in 2004, mainly due to a increase in unit sales of parts for local production at affiliates accounted for under the equity method in Indonesia* and favorable sales in Thailand and Brazil.
Honda’s motorcycle business in North America for the first nine-months of the company’s business year accounted for 25.7% of its total motorcycle business, behind Asia (27.4%) but ahead of Japan (9.0%), Europe (16.9%) and Other Regions (20.4%).
Motorcycle unit sales in North America fell from 413,000 units in 2004 to 404,000 units in 2005; sales in Japan dropped from 285,000 to 275,000; sales in Europe increased from 247,000 units to 255,000 units; and sales in Asia jumped from 6.127 million to 6.157 million
In North America, nine-month revenue was JPY 3,990.9 billion ($33.802 billion), up 16.7% from the same period of the previous year. Honda said positive currency translation impact and increased unit sales in automobile and power product businesses accounted for the rise. Operating income in North America was JPY 248.0 billion ($2.101 billion), which was approximately the same level as the corresponding period in 2004.
*Net sales of Honda-brand motorcycle products that are 100% locally procured, manufactured and sold by overseas affiliates accounted for under the equity method 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 and forecasts. For the fiscal nine months, the number of products 100% locally procured, manufactured and sold by affiliates in India and China increased to approximately 1.530 million units.