For the first quarter ended March 31, 2011, Honda Motor Co. recorded a net income of 44.5 billion yen ($545 million), a 38 percent drop. Honda missed the estimates of analysts of an average of 93.8 billion yen, compiled by Bloomberg. The company identified the March 11 earthquake that disrupted output and vehicle sales in Japan as contributing factor to the decline in net income.
The company’s sales dropped 2.9 percent, reaching only 2.2 trillion yen. The players in the automotive market are aiming to bring their production to pre-quake levels after the disaster disrupted components supply and electricity in Japan.
Earlier this week, Honda has disclosed that it expects its output to resume normal levels in a global scope by the end of this year. However, president Yuuki Sakurai at Fukoku Capital Management Inc. in Tokyo stated that even if production resumes, the sales may not. Specifically, Sakurai stated that the May and June sales of various companies may be close to zero since there would be nothing much to sell.
Honda did not give a forecast on its full-year earnings citing the impact of last month’s disaster on production.
On the global scale, the company recorded a 1.6 percent drop in sales to 860,000 in the first quarter ended March 31, generally due to the 22 percent decrease in Japan.
On the other hand, sales in its Asian markets, excluding Japan, increased to 238,000 units, a 0.4 percent increase, while deliveries in its North American market increased 7.9 percent, reaching 356,000 units.
In Japan, the company’s March output dropped 63 percent to 34,754 units. The company will continue producing cars and components in Japan at 50 percent of the regular capacity until the end of June.