Honda cuts profit targets by 57 percent

Honda said today that it will cut its annual profit targets by over half after reporting that its profits fell nearly 90 percent in the latest quarter due to rising costs, falling demand, and a stronger yen. Honda’s net profit for the Oct.-Dec. period was 20.24 billion yen ($224.9 million USD) down from 200 billion yen a year earlier.

“The results were a lot better than expected. Honda is doing well, relative to the other Japanese car makers,” Credit Suisse auto analyst Koji Endo told the Associated Press.

Honda has now cut its profit target for the fiscal year ending March by 57 percent to $80 billion yen ($888.9 million USD) – down from 185 billion yen. Revenue target was lowered by 3 percent to 10.1 trillion yen.

During the latest quarter, Honda sold fewer cars in its major markets (North America, Europe and Japan), but reported a strong growth in Asian countries. Honda plans to proceed with the announced job and production cuts.

Source: Detroit News