Honda reports surging profit, but chops FY outlook

The automaker said its net profit of 213.96 billion yen ($2.7 billion) was up from 92.23 billion yen in the same period a year ago, while sales were 4.71 trillion yen, up from 3.60 trillion yen.

Honda also cut its full-year profit forecast by 20 percent, saying a strong yen and lower sales would hit its results.

The company now expects to earn 375 billion yen in its fiscal year to March 2013, down from an earlier 470 billion yen forecast, with sales also tipped to fall to 9.8 trillion yen, down from 10.3 trillion yen.

"We expect earnings to come below the estimates announced on April 27, 2012, due to a decrease in sales volume amid the changing business environment and the impact of currency exchange rates," Honda said in a statement.

The company credited its rosy first-half results largely to a rebound following last year's quake-tsunami disaster.

Japanese automakers saw extensive damage to their supply chains as a result of the twin disasters in Japan and flooding in Thailand in the autumn.

A high yen also ate into exporters' sales and profits.

The country's automakers have come under pressure from the value of the currency, which last year hit record highs against the dollar and remains strong, making exports relatively more expensive overseas and cutting the value of repatriated earnings.

Honda and rivals Nissan and Toyota have also been hurt by territorial tensions between Tokyo and Beijing, with the trio's September sales in China, the world's biggest vehicle market, plunging.

Honda sales dropped 40.5 percent to 33,931 units, it said earlier, but made no mention of the spat in its earnings announcement on Monday.

The two countries have been locked in a festering row over the islands in the East China Sea, controlled by Japan but claimed by China.

Source: AFP