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Honda reports drop in quarterly profit

Honda reports drop in quarterly profit

Honda Motor Co. reported a 41 percent drop in second fiscal quarter profit Tuesday on declining sales and a stronger yen, forcing Japan's second biggest automaker to lower its earnings forecast for the full year.
Honda said Tuesday that July-September profit was 123.3 billion yen ($1.3 billion), down from 208.4 billion yen a year earlier. Sales for the quarter fell 4.9 percent to 2.827 trillion yen ($30.4 billion).
Tokyo-based Honda, offering models reputed for mileage such as the Civic and Accord, has not suffered the deep problems of its U.S. rivals but the results show the company is vulnerable to a global slowdown.
The surging yen, which erodes the value of the automaker's overseas earnings, has added to a bleaker outlook for Honda. The dollar has nose-dived recently from above 100 yen to around 90 yen.
Honda now projects a 485 billion yen ($5.2 billion) profit for the fiscal year ending March 31, 2009. In July, it projected a 490 billion yen ($$5.3) profit for the fiscal year.
The new full year forecast would mark a 19 percent drop from the previous year, according to Honda.
Honda said it expects the dollar to average about 100 yen for the second half of the fiscal year.
Honda also cited soaring material costs despite cost reduction efforts for its profit decline in the latest quarter.
While revenue declined, Honda held up in vehicle sales _ selling 935,000 vehicles for the second quarter, little changed from the same period the previous year, it said.
Lower vehicle sales in North America and Europe were offset by other markets where demand was strong, including Brazil, China and Japan, Honda said.


Updated : 2021-07-24 09:15 GMT+08:00