U.S. outlook trimmed
Citing crimped chip supply, Honda trimmed its North America sales outlook by 135,000 units in the current fiscal year ending March 31, 2023. It now expects North American sales to total 1.26 million vehicles for the 12-month period, down 2.2 percent from the previous fiscal year.
“The worst of the period is over,” Takeuchi said of the global semiconductor crunch. “But there are still shortages of specific applications.”
Takeuchi’s assessment came as parent company Honda Motor Co. reported financial results for the fiscal second quarter ended Sept. 30. Boosted by big foreign exchange rate gains, Honda said operating profit rose 16 percent to 231.2 billion yen ($1.60 billion) in the period.
The ongoing semiconductor shortage as well as pandemic-related lockdowns in China undercut production. And higher costs for raw materials eroded earnings.
But the beneficial foreign exchange rates offered a big tailwind for Japan’s No. 2 automaker.
The yen’s dramatic weakening against the U.S. dollar and other currencies added 89.0 billion yen ($615.9 million) to the bottom line in the July-September period. The forex gains offset sliding sales and rising expenses to drive Honda to a quarterly profit increase.
The yen’s weakening against the U.S. dollar boosts the value of earnings repatriated to Japan. The currency has lost 28 percent of its value against the dollar since Jan. 1.
Revenue reached a record high in the period. But because it was fueled by exchange rates, not by unit sales, Operating Officer Eiji
Fujimura said the record was nothing to be proud about.
Net income climbed 14 percent to 110.9 billion yen ($767.4 million) from a year earlier.
Worldwide sales increased 5.8 percent to 970,00 vehicles in the quarter. Deliveries to North America fell 14 percent to 275,000 vehicles, as European volume dropped 21 percent to 22,000.
Because of the weakening yen, Honda also lifted its outlook for the full fiscal year ending March 31, 2023. It now anticipates higher than earlier forecast operating profit and net income.
Full fiscal year operating profit is now expected to essentially equal the previous year’s haul at 870.0 billion yen ($6.02 billion). Net income is seen increasing 2.5 percent to 725.0 billion yen ($5.01 billion). The improved outlooks come even as Honda trimmed its sales forecast.
Honda cut 100,000 vehicles from its global full fiscal year outlook to 4.1 million, due to parts shortages. But the revision still marks a 0.6 percent increase over the previous year’s result.