Honda Motor Co. reported consolidated income of ¥174.6 billion, or $1.7 billion, for its financial first quarter. The result was down 6.1% from the year-ago quarter, as the company grappled with quality and currency issues.
The company struggled with the impact lingering problems with the Takata airbag issue and “unfavorable currency effects” from a stronger yen. Honda said the dollar traded at about 108 yen in recent months, compared to 121 yen the same period a year ago.
However, the result exceeded expectations. Analysts surveyed by FactSet had forecast at 133 billion yen ($1.3 billion) quarterly profit.
Honda rode strong U.S. and China auto sales to the better-than-expected result. It also is counting on a sales increase globally. The company expects to sell 4.9 million vehicles for the fiscal year through March 2017, which would be an increase from last year’s 4.7 million.
(U.S. car sales sputter slightly in July. For more, Click Here.)
“Immediate sales for the time being are in good shape, especially in China and the U.S., in part due to launches of new models,” said Seiji Kuraishi, Honda’s executive vice president, reported the Wall Street Journal.
The company’s U.S. market share expanded to 9.5% and Honda is looking for more growth with new models such as the Ridgeline pickup truck, which went on sale in June.
(Some analysts think that U.S. auto sales have hit their peak. Click Here for the reasons.)
The Tokyo-based maker is expecting the demand for light trucks and sport-utility vehicles in the U.S., which has been carrying the market to record-setting sales numbers, to do the same with the Ridgeline.
However, that frenetic sales pace slowed a bit in June and again in July. That said, Honda did not change its full year forecast at 390 billion yen ($3.8 billion) in profit, up 13% from the previous year.
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Shares in Honda Motor Co gained 3.7% after jumping more than 5% earlier after Japan’s No. 3 automaker posted the stronger-than-expected rise in first-quarter profits, Reuters reported.