Honda Trims Full-Year Profit Forecast on China Hit
Honda Motors trimmed its annual net profit forecast by 1.3 percent to 370 billion yen after car sales have been knocked in China, and as it continues to struggle in Europe.
Japan's third-biggest automaker said its net profit for October-December was 77.4 billion yen ($849.94 million), compared with the 47.7 billion yen it booked last year when it suffered from disrupted supply chains after floods hit it and its suppliers' factories in Thailand.
(Read More: Honda Says Plans to Cut 800 Jobs in Britain)
The result was below the average estimate of 111.4 billion yen among seven analysts polled by Thomson Reuters. Honda is the first among major Japanese automakers to announce its third quarter earnings. Toyota Motors is set to announce on February 5, and Nissan Motors on February 8.
In the final quarter they will be helped by the yen's recent weakening against the dollar, as they can convert overseas profits back to the yen at a more favorable rate and export cars more cheaply.
Among Japan's top three carmakers Honda relies most heavily on the United States, which accounts for some 40 percent of its vehicle sales by volume. For rivals Toyota and Nissan, the U.S. accounts for about a quarter of global auto sales.
In calendar year 2012 the U.S. auto market posted its strongest sales figures since 2007 at 14.5 million vehicles, up 13 percent from 2011, and the momentum is likely to continue into January as well.
The yen's value eased 11 percent versus the dollar between October and December, trading at around 86.7 to the dollar by the end of the quarter from 78 at the start. Since then it has weakened further to around 91 to the dollar.