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Industryweek 9002 062615 Takata Airbag Honda Revised Profit2

Honda Revises Earnings Due to Airbag Recall

June 26, 2015
The company's revised net profit for the fiscal year drops 6%, to just under $4 billion, in large thanks to the ongoing Takata exploding airbag crisis.

TOKYO — Japanese car giant Honda revised down its annual earnings for the last fiscal year on Friday, blaming the expanding recalls of faulty Takata, which have been linked with eight deaths.

The third-biggest automaker in Japan, Honda said its net profit for the year to March this year was 493 billion yen $3.98 billion), falling 14.1% from the previous year. The level compared with the originally announced 522.7 billion yen ($4.23 billion) that would have marked an 8.9% annual slide.

Updated operating profit came to 606.9 billion yen ($4.91 billion), which would register as an annual fall of 19.1%, lower than the earlier stated 651.6 billion yen ($5.27 billion), Honda said. The company kept its annual sales figure at 12.6 trillion yen ($101.8 billion), up 6.8% from the previous year.

Honda's bottom line and its brand have faced a battering in the crisis, with Takata still struggling to find out what is wrong with its airbags.

Eight people are known to have died after Takata-made airbags deployed with excessive explosive power, spraying shrapnel into the vehicle.

Tokyo-based Takata agreed last month to double a U.S. recall to a record of more than 30 million vehicles made by some of the world's bigger automakers.

Officials at the firm have said they have yet to find out exactly what was wrong, although studies suggest that humidity and climate are associated with the malfunctions.

Takata chairman and CEO Shigehisa Takada apologized Thursday for the crisis in his first public appearance since it began.

Chronically weak auto sales at home in Japan as well as sliding demand in China, the world's biggest vehicle market, also weighed on Honda's earnings.

The company kept its outlook for the ongoing year to March 2016: a net profit of 525 billion yen ($4.24 billion) on sales of 14.5 trillion yen ($117.2 billion).

Copyright Agence France-Presse, 2015

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