Autos

Honda forecasts 6% rise in annual profit on Europe factory revamp

Key Points
  • Honda Motor forecast on Wednesday a 6% increase in operating profit for the current fiscal year.
  • The automaker cited cost reduction efforts and a restructuring of its production network in Europe.
  • Honda expects profit to rise to 770 billion yen ($7 billion) in the year to March 2020, compared with the 834 billion yen average of 22 analyst estimates compiled by Refinitiv.
48411668 japan earns honda-993985059_v2.jpg
Vehicles of Honda Motor Co. are on display in front of the Japanese automaker's headquarters in Tokyo Tuesday, July 31, 2012. Honda's quarterly profit quadrupled to 131.7 billion yen ($1.7 billion) as the Japanese automaker bounced back from last year's natural disasters with more vehicles sold across all key regions except for Europe. (AP Photo/Itsuo Inouye)
Itsuo Inouye

Honda Motor forecast on Wednesday a 6% increase in operating profit for the current fiscal year due to cost reduction efforts and a restructuring of its production network in Europe.

Japan's third-largest automaker signaled that it was looking to reduce global production costs by 10% by 2025 and scale back the number of model variations, underscoring the cost pressures facing traditional automakers as they compete in a market that is being reshaped by tech companies and ride-sharing.

Honda expects profit to rise to 770 billion yen ($7 billion) in the year to March 2020, compared with the 834 billion yen average of 22 analyst estimates compiled by Refinitiv.

Operating profit was 726 billion yen in the year ended March, versus an average estimate of 803 billion yen.

Honda's profit forecast is based on the assumption that the yen will trade around 110 to the U.S. dollar in the current financial year, compared with 111 yen in the year just ended.

A stronger currency can dent profits repatriated from overseas.

Next Article
Tech

Lyft posts large loss in its first quarterly report as a public company

Key Points
  • Lyft reported a loss per share of $9.02, adjusted.
  • While analyst estimates for Lyft’s first quarter could have been on the low-end due to a lack of data typical of a company fresh on the public market, Lyft’s loss is still significant.
  • The steep loss still marks an improvement from Lyft’s year-ago quarter, when Lyft reported a non-GAAP loss of $11.40 per share.