Honda reports 19 percent rise in profit on sales, cost cuts
TOKYO (AP) —
Improved sales and cost cuts helped Japanese automaker Honda Motor Co. shrug off lingering troubles from the Takata air bag recalls to log a nearly 19 percent improvement in its fiscal first quarter profit.
Tokyo-based Honda, which makes the Fit subcompact, Accord sedan and Asimo robot, on Tuesday reported a 207.3 billion yen ($1.9 billion) profit for April-June, up from 174.6 billion yen the same period last year.
Quarterly sales rose 7 percent to 3.71 trillion yen ($33.8 billion).
Honda expects to sell 5.08 million vehicles for the fiscal year through March 2018, up from almost 5.03 million vehicles for the last fiscal year.
Honda raised its annual profit forecast to 545 billion yen ($5 billion) from an earlier forecast it gave in April for 530 billion yen ($4.8 billion). Its profit was 616.5 billion yen in the previous year.
Honda is the biggest customer of Japanese air-bag maker Takata Corp., which has filed for bankruptcy as it recalls millions of defective air-bags whose inflators can explode with too much force, spewing shrapnel.
But Honda has been gradually recovering from the initial aftermath of the recall fiasco although uncertainties remain such as victims' lawsuits, and costs from the recall following Takata's bankruptcy filing.
Like other Japanese automakers, Honda is getting a lift from a cheaper yen, compared to what it had earlier expected. Honda, which also makes motorcycles, had earlier expected the dollar to trade at 105 yen, but now expects that to be 107 yen, it said.
Nissan Motor Co. reported last week a 1 percent drop in April-June profit at 134.9 billion yen ($1.2 billion), despite strong overall sales. Toyota Motor Corp. reports earnings Friday.