Honda Motor Co. increased its estimates for its full-year profit by 18 percent as it recovers faster than had been anticipated from the damage caused by the March 11 earthquake in Japan.
Specifically, the Tokyo-based company revealed in its statement that it may record a net income of 230 billion yen ($2.96 billion) in the year ending March 31, 2012, versus its earlier estimates of 195 billion yen.
The company, which is the third largest vehicle manufacturer in Japan, recorded a 534 billion yen profit in the year-earlier period.
Honda, among other automakers in Japan, is recovering from the March disaster, which caused components and power shortages as well as damaged vehicle plants. The company now expects to sell 4 percent more cars this fiscal year versus its forecast in June. According to the company, it raised its 12-month sales forecast by 4.8 percent to 8.7 trillion yen from a previous estimate of 8.3 trillion yen.
Furthermore, the company disclosed that its first-quarter net income dropped 88 percent after the strong yen slashed earnings from exports and the March 11 disaster disrupted production.
Moreover, the company recorded 31.8 billion yen in net income during the quarter ended June 30, versus the 272 billion yen in the same period last year.
It was expected to record a net loss of 36.2 billion yen, based on the average estimates of eight analysts as surveyed by Bloomberg. Sales dropped 27 percent from 2.4 trillion yen to 1.7 trillion yen.
The company’s first-quarter profit compares with bigger competitor Nissan Motor Co.'s first-quarter result of 85 billion yen net income. Honda was generally adversely affected by a semiconductors shortage because it had ordered a new type of chip for its updated variant of Civic compact, which went on sale in the U.S. in late April.