Honda Motor’s (NYSE:HMC) fiscal first-quarter net profit grew by double digits as the Japan-based automaker got a lift from strong U.S. sales and a weak yen despite the Takata air bag recalls.
Advertisement
Quarterly gross sales gained nearly 16 % to three.
Sales were up 15.5% to 3.7tn yen following a 27% increase in the US.
Takata has recalled nearly 34 million air bag inflators in the United States.
At the very least eight individuals have been killed and 100 have been injured by Takata air luggage, which may explode with an excessive amount of pressure and spew shrapnel into the vehicle.
Honda, which has a stake in Takata, relies heavily on the Tokyo-based air bag and seatbelt maker.
Honda estimates its recalls related to Takata air bags worldwide at 24.5 million vehicles.
It did not break down costs for the quality woes, but said that was part of the overall sales and administrative expenses estimated at 60 billion yen (US $484 million) for the fiscal year through March 2016.
Nissan on Wednesday said its three-month net profit jumped 36.3 percent to $1.3 billion on strong sales in North America, Europe and China. The CR-V crossover also did well in the region.
Like other Japanese carmakers, Honda has benefited from the cheaper yen, which boosts the value of repatriated earnings. The greenback has been buying and selling at 120 yen ranges, up sharply from about 102 yen a yr in the past. It was a rise from 155.6bn yen in the same period last year and beat expectations of 145.7bn yen.
It expects to promote four. Executive vice president Tetsuo Iwamura told reporters that while profits had increased more than expected in the fiscal first quarter, Honda was reluctant to raise guidance because of uncertainties around future exchange-rate moves as well as “costs related to quality issues”.
Honda’s sales in North America and Asia rose from a year ago, but weak consumer demand at home saw Japanese vehicle sales fall.
The company’s operating profit margin was 6.5% for the quarter.
Advertisement
The company posted net income for the second quarter of $4.19 billion, down 52 percent from $8.78 billion in the second quarter of previous year. At the end of Honda’s most recent quarter (June 30), one U.S. dollar bought about 123 yen.
