TOKYO -- Honda Motor Co. reported a decline in first-quarter profit as deliveries in its home market fell and spending on overseas plants rose.
Net income fell 7 percent to 122.5 billion yen ($1.25 billion) in the three months ended June 30, from 131.7 billion yen a year earlier, the company said in a statement today.
Honda maintained its forecast for full-year profit to rise 58 percent to 580 billion yen as the weaker yen boosts the value of overseas earnings. The automaker's sales growth in the United States was slightly behind the industry's.
"Pickups and SUVs are growing in the U.S. market, helping the Detroit-based carmakers. Our light-truck supply was relatively low, but we are introducing a new model," Executive Vice President Tetsuo Iwamura told reporters today, referring to the Acura MDX.
In the quarter ended June 30, Honda's U.S. sales gained 7.1 percent to 407,927 units, according to the carmaker. Sales in the U.S. industry expanded 8.6 percent in the period, Autodata figures show.
Honda posted an operating profit of 185 billion yen for the first quarter, up from 176 billion yen a year earlier.
The automaker kept its forecasts for sales of 12.1 trillion yen and operating profit of 780 billion yen in the year ending March 31.
Sales in Japan, Honda's second biggest market behind the United States, dropped by 24 percent in the first quarter to 140,000 vehicles after government subsidies for green cars ended late last year.
Honda, which has set an aggressive goal to expand global annual sales to 6 million vehicles by March 2017 from the current 4 million, is facing expansion costs as it is building multiple new plants or expanding capacity at existing factories.
Its capital expenditure spending in the first quarter jumped 79 percent year-on-year to 171 billion yen.
Honda's new Yorii plant in Japan has started to operate earlier this month, while its new plant in Mexico is set to start operations in 2014. It is also planning new plants or expansions in multiple countries including Thailand and China.
"At times we see various big unexpected moves in emerging markets so we are cautious. But automobile and motorbike demand will certainly grow there so we will continue to build foundations for success," Executive Vice President Tetsuo Iwamura said.
Honda saw Thai April-June sales jump nearly 30 percent from a year ago to around 59,000 vehicles as it still has some 100,000 orders from before end-2012 when the government still offered subsidies for first-time car buyers.
While sales in Southeast Asia's biggest car market have been dropping in the recent months and Honda expects some cancellations of the existing orders, Iwamura said the company aims to retain demand by introducing new models.
Honda kept its forecasts for revenue of 12.1 trillion yen and operating profit of 780 billion yen in the year ending March 31. It also kept its projection for deliveries at 4.43 million units.
Bloomberg and Reuters contributed to this report.
