The third biggest carmaker in Japan has increased its profit prediction to the highest level in seven years, riding the boost provided by the dwindling local currency and advances in emerging markets.
According to the Tokyo-based automaker, net income is expected to rise 4.5% to 600 billion yen ($5.9 billion) for the current fiscal year, which ends March 31, 2015. The previous forecast was 595 billion yen – but both are behind analyst forecasts, which expected a 631.4 billion yen average.
“The first impression was pretty good, at least in the first 30 seconds I look at it, but the details lead to a different impression,” said Koji Endo, an auto analyst at Advanced Research Japan. “It was a bit disappointing, because upward revision was entirely thanks to the weaker yen.”
For the first quarter in the fiscal year, Honda’s net income climbed 20% to 146.5 billion yen and the operating profit was up 7.1% to 198 billion yen. Worldwide sales rose 5.4% to 2.99 trillion yen. The automaker aims to cut its dependence on North America, where deliveries slid about 1% by increasingly releasing models specifically tailored for prospective emerging markets – such as China, Indonesia or India. Profit was dented by the North American fail and also by the costs incurred because of the recalls associated with the Takata airbag defects.