Monday, November 1, 2010

Honda Raises Yearly Outlook

While cross-country rival Toyota may be slashing its production forecast, Honda has announced that it has raised its full-year financial outlook. Honda’s fiscal year ends March 31st.

Honda announced on Friday that it has upped its annual profit forecast to $6.2 billion, a significant increase over its previous goal of $5.65 billion. Honda says its year end sales may total as much as $111 billion.

Although the strong value of the yen has hurt Honda’s earnings, better than expected sales in the Asia region have helped alleviate losses associated with the poor exchange rate. Honda’s motorcycle division has also been performing well.

“Honda is solidly increasing its profitability, and the motorcycle unit is also supporting the business,” said Tadashi Usui, an analyst at Moody’s Investors Service in Tokyo. “Compared with Toyota, Honda is more economical with its capital investments, so we can be confident about its finances from a fixed-cost perspective.”

Despite the positive news, Honda expects a weaker second half to its fiscal year. Honda is calling for a $1.14 billion profit during the final six months of the year, compared to profits of $5.05 billion during the first half.

References1.’Honda raises annual…’ view


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