Honda Ekes Out a Thin Profit to Start the 2010 Fiscal Year
Honda stayed in the black for the fiscal quarter that ended June 30, but just barely.
Like other automakers, Honda is trying to cut production and expenses faster than the fall in demand. Earlier today, Germany’s Daimler reported a net loss of about $1.5 billion for the same quarter.
Honda’s net income fell to about $79 million for the quarter, a drop of 95.6 percent. Honda blamed the drop on lower unit sales, plus unfavorable currency exchange rates versus the U.S. dollar and the euro, which cut into the value in yen of profits denominated in those currencies.
The quarter just ended was the first quarter of Honda’s 2010 fiscal year. Revenue of $20.9 billion was down 30.2 percent from the year-ago quarter. Honda said that if exchange rates had stayed the same as the year-ago period, revenues would have been down only 20.7 percent, due primarily to lower automobile sales.
Worldwide, Honda’s automobile sales totaled 766,000 units, down 20.4 percent from the same period last year. In Japan, unit sales of 128,000 were flat with a year ago, thanks to sales of two new models, the Honda Insight hybrid and the Freed, a compact minivan that’s not offered here.
In North America, Honda automobile unit sales were down about 30 percent, to 323,000. Revenue in North America fell 34.6 percent, to $10.2 billion. Operating income in North America fell 92.4 percent, to $75 million.
Photo: Honda
Jim Henry has been writing about the auto industry from a business perspective for more than 20 years. He is also a member and past president of the New York-based International Motor Press Association.
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