Honda profits plunge as it seeks to recover from earthquake
The Japanese automaker saw profits fall sharply as it struggled to reorganize in the wake of the earthquake and tsunamis that struck the island nation last March.
From the Associated Press:
TOKYO (AP) - Honda says profit for the fiscal year through March 2012 is expected to plunge 63.5 percent as vehicles sales slipped amid a parts shortage caused by the quake and tsunami in northeastern Japan. Honda Motor Co. gave the forecast Tuesday, more than a month later than usual. Like other Japanese automakers, the maker of the Odyssey minivan and the Fit compact needed more time to assess the aftermath of the March 11 disaster. Honda is projecting a profit of $2.4 billion for the fiscal year ending March 2012, down sharply from the previous fiscal year.
Reuters reports that Honda released the numbers later than usual:
Honda, like other Japanese automakers, had delayed providing financial forecasts because of uncertainty over when parts supplies would recover after the magnitude 9.0 quake in Japan's northeast. In late April, it announced a 52 percent drop in January-March operating profit after production came to a virtual halt in the second half of March. "These figures are pretty bad," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Tokyo, adding they could temporarily push Honda's stock lower.
Fumihiko Ike, Honda's chief financial officer, said the company plans to ramp up production in the second half of the year to make up for losses - that includes boosting production at its U.S. facilities in Indiana and Alabama "to achieve a more than 20 percent output rise beyond autumn."