Honda reports profits up 27 percent Despite Dollar's decline

[Ming]

Japanese automaker Honda reports profits up 27 percent for the fourth quarter
YURI KAGEYAMA
Associated Press
Tue, Apr. 26, 2005

TOKYO - Japanese automaker Honda Motor Co. said Tuesday that its profits rose 27 percent in its fourth fiscal quarter as surging sales offset the damage from an unfavorable exchange rate. Full-year profit rose 5 percent as Honda reported its fourth consecutive year of record sales. It forecast a decline in earnings but higher sales this year.

The report comes amid strong financial reports from other Japanese automakers in contrast to results being reported at U.S. rivals General Motors Corp. and Ford Motor Co., which are losing market share in the United States to Asian automakers.

Tokyo-based Honda's group profit for the January-March period totaled 94.1 billion yen ($891 million), up from 74.1 billion yen the same period a year ago. Sales rose 9.5 percent to 2.3 trillion yen ($21.8 billion) from 2.1 trillion yen the same period a year ago.

Honda's profit for the fiscal year through March totaled 486 billion yen ($4.6 billion), up 5 percent from 464 billion yen the previous year.

Fiscal year sales climbed to a record high 8.65 trillion yen ($81.9 billion), up 6 percent from 8.16 trillion yen the previous year.

Honda is forecasting 450 billion yen ($4.3 billion) for the fiscal year ending March 31, 2006, down 7 percent from the latest fiscal year, as sales rise 7.5 percent to 9.3 trillion yen ($88 billion).

For the past fiscal year, Honda sold 3.24 million vehicles, up 9 percent from 2.98 million. It plans to sell 3.4 million automobiles this year.

Although Honda's vehicle sales for the fiscal year slipped 0.6 percent in Japan, they rose 16 percent in Europe and 50 percent in Asia. North American sales inched up 1.1 percent from the previous year.

The dollar's decline in the past year has hurt the earnings of Japanese exports like Honda by lowering the value of its overseas earnings when converted into yen. The dollar was trading at about 113 yen in fiscal 2003, but it fell to about 108 yen in fiscal 2004.

For the fiscal year through March, Honda said it lost 94.6 billion yen ($896 million) from fluctuations in currency rates but gained 49.1 billion yen ($465 million) from cost reductions.

Article Source: http://www.kansascity.com/mld/kansas...s/11492289.htm

[goblue]

Ming - can we have an import good news section that you have to click on to see...I'm not sure how much more of this I can take. Personally, I dislike Toyota, and despise Honda.

[mrfunji]

Pardon my ignorance, but why is Honda reporting 4th quarter results now when most companies are reporting 1st quarter?

[LazyGeneral]

Corporations can stage their Q's whenever they like. Where I work year end is January 31, so our Q1 ends April 30.

I was thinking while reading this news that GM has the classic front runner problem. Declining sales are a hudge problem because you are organized to sell so much. Even when you are still the biggest, your profit falls apart because of your size. Whereas, if you were smaller, you can work employees harder to sell more, while gradually growing.

[Ming]

Originally Posted by goblue

Ming - can we have an import good news section that you have to click on to see...I'm not sure how much more of this I can take. Personally, I dislike Toyota, and despise Honda.

I think it is good to keep an eye on the enemy, and no one forced you to click here goblue. Ah, you mean just seeing it on the ticker. Believe me, I understand the feeling - this article itself popped up when I was doing a news search for GM.... It's difficult to escape Toyohondassan, so I prefer to meet them straight on.

[mjd1001]

This is a little suprising to me.

I certainly do not follow Honda or Toyota closely, but the last 3-6 months I seem to have read many articles and posts in these forums saying that Honda Accord sales are not doing well lately, and even some criticism that the other subcompacts have passed the Civic in popularity.

I guess things for Honda are not as bad as I was led to believe.

[goblue]

Originally Posted by Ming

I think it is good to keep an eye on the enemy, and no one forced you to click here goblue. Ah, you mean just seeing it on the ticker. Believe me, I understand the feeling - this article itself popped up when I was doing a news search for GM.... It's difficult to escape Toyohondassan, so I prefer to meet them straight on.

I was being a little facetious, but yeah - I am a little tired of it. You're right to keep an eye on it though - I just wish I could hang it up in all the GM buildings so the people who need to see it can.

[funkypunnk]

We must first remember that it is due to Honda, Toyota, Nissan, et al that we enjoy comparable quality in American cars. Remember the 70s and 80s, a time when American cars were totally devoid of quality control and the imports gained major ground due to their reliability superiority! It was those decades that cemented into people's minds that Imports meant quality while domestic was just the opposite. That mindset still exists today even though the domestic manufacturers have leveled the playing field. We owe our current quality to them whether you like it or not.

I have owned 4 Hondas, 2 Nissans, and 1 Toyota and they were all great cars. I bought Honda CRXs in 88 and 90 because the Cavalier, Sunbird, Omni, and Escorts couldn't compete in quality, reliability, or refinement. In 89 I bought a Nissan pickup for the same reason. All of those cars delivered over 150,000 miles with only oil changes, tires, and brakes. The 88 CRX ended up with 375,000 miles and only needed one tune up and one timing belt. All the while delivering over 34 MPG to the day I sold it due to a bad alternator that could not be removed as the steel crossbolt had fused to the aluminum alternator due to electrolysis.

I currently only buy Domestic as I believe they have minimized the quality differences that once existed.

Also notice that the greatest gain in sales came from Europe with the US being flat. Europe embraces smaller cars then we do and therefore Honda's line fits their tastes better. I see nothing new in this report other than the fact that Honda, like all of the other major auto manufacturers, are seriously targeting emerging markets in Europe and Asia for their continued growth.

[mbukukanyau]

Originally Posted by mrfunji

Pardon my ignorance, but why is Honda reporting 4th quarter results now when most companies are reporting 1st quarter?

Its called cooking the books

[Tiger]

As high priced and low ball engined as the Acura's (Euro Accords) are, this doesn't surprise me one bit. Sell a 6 cylinder RL at an 8 cylinder price, hope customer doesn't notice. Chaching! Sell a 4 cylinder TSX at a 6 cylinder price, talk about refinement. Chaching! In the end you make a profit. Shocking!

Just my .02

[SweC32]

You might want to check today's news stories on Honda....

Honda just forecast an end to its four-year run of record profits due to derivatives losses of as much as 63 billion yen ($595 million) and lower earnings from Asian affiliates.

Last year Honda booked a gain of 55.5 billion yen from derivatives that helped them generate that record income.

And the reason for just reporting fourth-quarter profits is that their fiscal year ends March 31, 2005.....

An 11 percent increase in truck sales in the US helped offset the 8.8 percent decline in car sales last year.

[joey]

With that same thought, GM should be making tons of money selling outdated designed SUV's, old pushrod engines and 4 speed transmissions. But they're not.
There's a great deal of engineering and investment to make those Honda V-6's feel like V8's and 4 cyl.'s feel like 6's. Less weight and better gas mileage to boot. Double overhead cam/ 4 valves per cyl in EVERY engine. VTEC technology, real production sellable hybrids and cross overs.

Hell, GM needs to buy Honda V6's to get Vue's to increase their sales. FACT!

GM needs to learn a lot from Honda. Sticking your head in the sand and saying you don't want to hear this information will not improve GM's market share.

[Tiger]

Originally Posted by joey

With that same thought, GM should be making tons of money selling outdated designed SUV's, old pushrod engines and 4 speed transmissions. But they're not.

Point taken. The truck market is different though, Honda will soon find that out.

Originally Posted by joey

There's a great deal of engineering and investment...

And marketing spin. (Eg. NEVER mention # of cylinders in ads/brochures.)

Originally Posted by joey

...to make those Honda V-6's feel like V8's and 4 cyl.'s feel like 6's.

In a re-badge Euro Accord aka Acura? Only if it's empty. And then it's at 5,000+rpm. Not fun in real life traffic. Or until you actually put some people or cargo in the vehicle.

Originally Posted by joey

Less weight and better gas mileage to boot.

Element owners report horrid gas mileage for a 4 cylinder. And absolutley NO hauling or cargo capabilities. She's seriously under engineered!

The new midsize Ridgeline gets 1-3mpg better than a full size Avalanche. Sorry, I'm not impressed given it's size and capabilities.

Originally Posted by joey

Double overhead cam/ 4 valves per cyl in EVERY engine. VTEC technology, real production sellable hybrids and cross overs.

And minimal capability at best in the "trucks".

Originally Posted by joey

Hell, GM needs to buy Honda V6's to get Vue's to increase their sales. FACT!

They were cheaper than the Caddy CTS/SRX engines. Pure business decision. Can't say I blame them. Yet another Acura engine in a standard nameplate (Saturn/Honda). Honda used Isuzu for years (while they needed them). No big deal right?

Originally Posted by joey

GM needs to learn a lot from Honda. Sticking your head in the sand and saying you don't want to hear this information will not improve GM's market share.

I'm a big fan of Hondas...until recently when they've lost their way. I've owned several too. I'll willing to still call a spade a spade though.

Re-read the spec sheets and these things are seriously deficient when compared to the competition ON ANY continent. I'm embarrassed for them quite honestly.

[Ohmywrd]

It seems like everyone just hates Honda because they make better cars and sold more. GM is improving but people are going to buy what is better. Before you say anything about them, you should drive one first. I bet you would love the Honda Accord. It's a solid well built car with good acceleration and handling.

[TiburonJT]

Originally Posted by Ohmywrd

It seems like everyone just hates Honda because they make better cars and sold more.

Honda has had huge decreases in sales of the Accord and Civic in the US.