Honda has always like to position itself as an engine company that also makes cars – and motorcycles and power tools. But it turns out the Japanese maker has also gotten into the seafood business. But its latest earnings report shows the dangers of doing things outside your normal comfort zone.
Some questionable deals for overpriced seafood have given the maker a serious haddock, its balance sheet floundering to the tune of $180 million written off as it crabbed about “inappropriate activity” involving a small and generally unknown division that trades in seafood.
Seems the fishy operation was committing one of the cardinal sins of the business world, buying low, selling high, and hoping to make money by fluke. Unable to sell their stock, Honda cooked the books, claiming to net a buyer for its seafood inventory.
The scale of the deception was not enough to seriously offset the maker’s third-quarter earnings, but did lead the maker to issue a statement in which it “apologized deeply for causing great worry and trouble.”
Despite the planned write-off, however, the company appears to be doing just fin. It reported a 4.8% increase in global car sales for 2010 and analysts have been hooked on the stock, driving its shares up like a flying fish, in recent days.