TOKYO - Citing the impact of a weak euro and higher marketing costs, Honda Motor Co. said last week that net and operating profit fell sharply in the third quarter ended Dec. 31, despite higher revenue.
Honda said its consolidated, or group, net profit fell 25.2 percent from the year-earlier quarter to ¥47.3 billion, or $412 million at current exchange rates, while operating income dropped 8.9 percent to $839 million.
Revenue rose 8.8 percent to $13.7 billion.
On an operating level, a rise in selling, general and administrative expenses almost completely erased the benefits of the increase in revenue and a more profitable model mix. Currency losses subtracted another $122 million from operating profits.
The weaker euro meant that Honda booked fewer yen from European sales during the quarter. Honda's average transaction rate for the euro dropped 20.2 percent to ¥94 during the quarter from ¥113 a year earlier.
Honda also was hammered in Europe by lower sales. Its unit sales fell 17 percent in Europe, but rose 9 percent in Japan and 3.3 percent in North America.
Honda Executive Vice President Koichi Amemiya said losses in Europe were growing, without giving further details. Honda has warned that its European operations would not break even next business year.