TOKYO -- Honda Motor Co., among the carmakers worst hit by Japan's devastating earthquake, warned today that its net income will plunge 64 percent this year on the back of falling sales.
Global volume will slide 6 percent to 3.3 million vehicles in the fiscal year ending March 31, 2012, Honda said in a statement giving its annual earnings outlook.
Net income is expected to fall to 195.0 billion yen ($2.43 billion), from 534.0 billion yen ($6.65 billion) the year before. Operating profit is seen tumbling 65 percent to 200.0 billion yen ($2.49 billion). The operating target is far below a consensus forecast of 407.2 billion yen ($5.07 billion) given by 20 analysts surveyed by Thomson Reuters.
Results will be undermined by costs from lost production, repairs of quake-damaged property and equipment and by foreign exchange losses from the yen's climb against the dollar and euro.
Like its rivals, Honda is struggling to recover from the March 11 earthquake that forced the carmaker to shutter factories for weeks. Honda said production in Japan will be back to normal later this month and overseas output will return to pre-quake levels in August or September.
Honda gradually has been bringing forward its recovery timeline.
But its net income and operating profit targets still come in lower than those announced last week by archrival Toyota Motor Corp. Toyota also predicts a smaller sales decline, of only 1 percent.
And while Toyota predicts it will end the year with higher global production, Honda forecasts a 6 percent overall drop in output to 3.35 million vehicles.
North America decline
Honda's North American sales are seen dropping 11 percent to 1.3 million units in the current fiscal year, from 1.458 million vehicles last year.
Japanese automakers are releasing annual forecasts for the fiscal year through March 31, 2012, later than usual. They typically give targets at the end of the fiscal year, but they refrained from doing so at the April earnings announcements, citing uncertainty after the earthquake.
Honda also expects displaced engineers from the company's quake-ravaged r&d center to return to work at the facility by month's end. One person died there and several were injured when the ceiling at the body design unit collapsed during the 9.0-magnitude temblor.
In March, Honda transferred 1,000 r&d employees, or about 10 percent of the center's work force, to other buildings on site or facilities elsewhere in Japan, while repairs were made.
Honda says U.S. production will return to normal in August for all models except the newly redesigned Civic. Honda has since said it will add a second shift later this year at its Civic plant in Greensburg, Ind., to help recoup lost production.