Honda to report a double-digit slide in quarterly operating profit

Article by Christian Andrei, on February 1, 2012

Honda Motor Co. is anticipated to post a double-digit drop in its quarterly operating profit and is believed to have an even bigger decline for the entire year. Honda was hit much worse by the flooding in Thailand and the earthquake in Japan compared to its competitors. Honda, the No. 3 automaker in Japan, is recovering from these supply interruptions the slowest. Its car plant was hit by floods in Thailand too.

This is believed to bring the operating profit of Honda during the October- December period down by 35% to 81 billion yen ($1.06 billion), according to Reuters’ survey of nine analysts.

Honda had withdrawn its earnings guidance last October due to uncertainty on the restart of production in Thailand.

Honda is the first among other Japanese automakers to reveal its earnings for the third quarter. Honda is also expected to give an update on the production in Thailand this week. Last year, Honda’s worldwide output fell by a fifth to 2.909 million cars, plunging below 3 million for the first time in eight years.

Except for Nissan, all other Japanese car companies produced fewer cars but their declines weren’t as major as Honda’s. Thomson Reuters I/B/E/S polled 24 analysts who concluded that for the year to March 31, 2012, Honda's annual operating profit is at 283 billion yen, a 50% drop from 2010-2011 when it felt the impact of the yen's rise against the dollar and euro.

Its consensus forecast is actually much higher than the 270 billion yen Honda estimated in August. As automakers have gradually increased their production in the final months of 2011, investors have turned their attention to an expected surge in sales as Honda restocks its depleted inventory.

The sleek and aerodynamic 2012 Honda Civic is built around its main design characteristics of utmost safety, enjoyable driving performance, distinct and refined style, maximum comfort and convenience, high quality workmanship and lasting durability, which allows the 2012 Civic to be one of the best in the compact car segment.

Equipped with an advanced safety system, the 2012 Civic uses Honda’s exclusive Advanced Compatibility Engineering (ACE) body structure which absorbs and deflects the impact of a frontal collision, thus reducing the impact on its cabin and other involved vehicles.

Aside from the ACE body structure to protect its passengers from collisions, the 2012 Civic also boasts of other impressive standard safety equipment such as dual-stage, multiple-threshold driver’s and front passengers airbags, the two-row side curtain airbags, Vehicle Stability Assist (VSA), the new Motion Adaptive Electric Power Steering System which aids the driver in avoiding oversteer and understeer predicaments, and an Anti-lock Braking System (ABS) with Brake Assist.

Based on the 2012 Honda Civic’s internal crash information, the Civic should easily hurdle tests conducted by the federal government’s National Highway Traffic Safety Administration (NHTSA) New Assessment Program. Furthermore, the 2012 Civic is also expected to be a leading candidate for “Top Safety Pick” by the independent Insurance Institute for Highway Safety (IIHS).

Honda engineers have always ensured the presence of the Civic’s iconic fun-to-drive character in every aspect of its design. And to aid the 2012 Civic in living up to this reputation, the suspension is fitted with a high quality MacPherson strut front suspension, a multi-link rear suspension system, and front and rear stabilizer bars- all these for a smoother, more pleasurable drive.

A Motion-adaptive Electric Power Steering (EPS) substantially enhances steering response and performance for both low-speed and high speed driving. Moreover, the EPS system is very efficient in terms of power consumption compared to traditional hydraulic power steering, thereby contributing to improved power and fuel economy for the 2012 Civic.

Topics: honda, profit

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