Honda Reports Strong Quarterly Results and Raises Outlook
Japanese automaker Honda has reported strong earnings for the last quarter, registering 36 percent improvement in profit. The company has reported strong numbers despite strength in Japanese Yen and also released a strong outlook for next quarter. Honda was also helped by cost cutting and the company has raised its full year outlook. Honda registered decline in sales but net profit has improved.
With release of new models, Honda reported strong sales in the United States and China. Honda is betting on growth in these markets in year 2017 as well. Honda currently ranks third among Japanese automobile companies in terms of revenue. For the quarter, Honda reported $1.5 billion in net profit. The company also reported better net profit as the cost related to recalls was missing during the current quarter, compared to previous quarters for Honda.
After registering strong sales in Chinese and the U.S. market, Honda has raised yearly guidance to $4.8 billion in profit for year 2017. In the recent quarters, Honda has been hit by Takata airbag related recalls which have impacted profitability of all Japanese automobile companies.
During the fiscal year, Honda aims at selling five million vehicles. The number is nearly 0.3 million higher compared to 4.7 million units sold last year. Honda and other automobile companies operating in the United States are under pressure from current Donald Trump administration to increase manufacturing in the United States. Automobile companies are still in ‘wait-and-watch’ mode and will decide their next course of action depending on Trump administration’s steps in coming months.
Honda has seven manufacturing facilities in the United States. The company claims that nearly 80 percent of vehicles sold in the United States are manufactured in the United States. Honda also has manufacturing facilities in Canada and Mexico.
A report published by Associated Press informed, “Almost all the world's major automakers have models affected by the Takata recall, but Honda is among the most exposed because it has had a close relationship with Takata. Honda expressed hopes that the worst of such expenses was behind it.”
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