Honda’s Quarterly Profit Drops to $1.25 Billion, Spending on Factories Outside & Fewer Deliveries Inside Japan Blamed

Spending on plants outside of Japan and a decline of deliveries in that country led to a decline in Honda Motor Co.'s profits for the quarter ending June 30 (Q1 in Honda's fiscal year). Net income was down 7% to 122.5 billion yen ($1.25 billion). The company still believes that it will meet its projections for a full year profit of 580 billion yen, a rise of 58% over last year. The weaker yen helps increase the profits at Honda, which is less dependent on the Japanese domestic market than Toyota and Nissan. However, sales in the U.S., up 7.1% to slightly over 400,000 units, lagged behind the overall 8.6% growth in that market. Honda picks it segments carefully it doesn't have a strong portfolio of the pickup trucks and SUVs that are driving that growth. In Japan, Honda's 2nd biggest market, sales dropped by 24% to 140,000 vehicles following the expiration of government subsidies for green cars. Operating profit for the quarter was 185 billion yen, up 9 billion from last year. Honda still expects to sell 12.1 trillion yen worth of product for the full year, yielding an operating profit of 780 billion yen. In addition to lagging sales in Japan, earnings were held down by Honda's spending to expand their global sales to 6 million units annually by 2017, a 50% increase. Building new factories and expanding existing facilities costs money. Capital expenditures were up 79% to 171 billion yen. A new facility in Yorii, Japan just came on line and a new factory in Mexico will start production next year. New or expanded plants are planned for a number of other countries including Thailand and China. Sales for the quarter in Thailand were up almost 30% to 59,000 units, and the company has a backlog of about 100,000 orders from 2012 when the Thai government was subsidizing first-time automobile buyers. from The Truth About Cars http://www.thetruthaboutcars.com

Put the internet to work for you. via Personal Recipe 680102