Honda Profit Tumbles 77.4%

Both impact of March earthquake and strong yen affected earnings.

Honda on Oct. 31 said net profit for the fiscal first half plunged 77.4% year-on-year, as it grapples with the impact of the March earthquake and a strong yen.

Honda said its net income in the first half ended September 30 totaled 92.2 billion yen (US$1.17 billion).

Operating profit in the period plunged 81.1% to 75 billion yen, it said, due to lower sales and production, the impact of raw material price increases and the effects of a stronger yen.

Revenue fell 22% to 3.6 trillion yen on lower automobile sales "led by decreased production attributable to the impact of the earthquake and unfavorable foreign currency translation effects," the automaker said.

Meanwhile net profit in the second quarter ended September 30 fell 55.5% on-year to 60.4 billion yen.

The maker of the Civic and Accord said vehicle shortages due to quake-related production problems pushed down sales in the United States and Japan.

Honda in August raised its full-year net profit forecast to 230 billion yen from an earlier estimate of 195 billion yen, although that figure represented a 56.9% drop from its year-earlier profit. But on Oct. 31 the company declined to give an updated annual forecast, as it continued to assess the impact on its operations of Thailand's worst flooding in decades, which has forced it to halt production there.

Honda has idled operations since early October at its four-wheel vehicle factory in Ayutthaya, central Thailand, as the factory remains submerged.

Japan on Oct. 31 intervened in currency markets to weaken the unit after it touched a fresh record high against the U.S. dollar, amid concerns that its strength could undermine the nation's fragile economic recovery.

Copyright Agence France-Presse, 2011

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