Honda Motor Co.
(
HMC
) revealed more than fourfold increase in profits to ¥131.72
billion ($1.66 billion) or ¥73.09 (92 cents) per share in the first
quarter of its fiscal year ending March 31, 2013 from ¥31.80
billion or ¥17.64 in the comparable quarter of 2011. However, the
company's profits were lower than the Zacks Consensus Estimate of
$1.15 per share.
Consolidated net sales and other operating revenues surged 42.1% to
¥2.44 trillion ($30.71 billion) driven by higher revenues in the
automobile business with the recovery in production from the twin
disaster in Japan last year, and increased revenues in the
motorcycle business, despite unfavorable foreign currency
translation effects.
Consolidated operating profits increased significantly by 679.5% to
¥176.01 billion ($2.22 million) from ¥22.58 billion a year ago,
driven by higher sales volume and model mix, despite increased
SG&A and R&D expenses as well as unfavorable foreign
currency effects.
Segment Results
Revenues in the
Automobile
segment soared 60.6% to ¥1.89 trillion ($23.84 million) driven by a
10.5% increase in unit sales. Operating profits were ¥100.66
billion ($1.27 million) in sharp contrast to a loss of ¥76.23
billion in the first quarter of fiscal 2012. Improved sales volume
and model mix favorably affected operating profits, despite
increased SG&A and R&D expenses and unfavorable foreign
currency effects.
Revenues in the
Motorcycle
segment scaled up 4.9% to ¥346.65 billion ($4.37 billion) due to a
2.1% rise in unit sales. However, operating profits fell 18.1% to
¥36.80 billion ($464.0 million) from ¥44.93 billion last year due
to increased SG&A expenses and unfavorable foreign currency
effects, despite improved sales volume and model mix.
Revenues in the
Financial Services
segment slid 3.3% to ¥131.28 billion ($1.66 billion) due to
unfavorable foreign currency translation effects. Operating income
dipped 23.8% to ¥40.84 billion ($514.94 million) from ¥53.61
billion due to a fall in residual gain of off-lease vehicle sales
and increased cost of credit risk.
Revenues in the
Power Product and Other
segment ebbed 5.6% to ¥67.47 billion ($851.0 million) due to lower
revenues in other businesses and unfavorable foreign currency
translation effects, despite higher unit sales. The segment had an
operating loss of ¥2.29 billion ($28.87 million) compared with a
profit of ¥260 million a year ago due to higher SG&A expenses
and unfavorable foreign currency effects.
Financial Position
Consolidated cash and cash equivalents was ¥1.13 trillion ($14.30
billion) as of June 30, 2012 compared with ¥1.25 trillion as of
March 31, 2012. Total debt amounted to ¥3.99 trillion ($50.30
billion) as of June 30, 2012, down from ¥4.11 trillion as of March
31, 2012. This translated into a debt-to-capitalization ratio of
47.3% compared with 48.3% a year ago as of March 31, 2012.
In the quarter, cash flow from operations decreased to ¥176.45
billion ($2.22 billion) from $201.70 billion in the fiscal
2012-quarter. Meanwhile, capital expenditures increased to ¥135.80
billion ($1.71 billion) from ¥73.55 billion in the comparable
period of 2011.
Guidance
Honda has projected revenues to improve 29.6% to ¥10.30 trillion in
fiscal 2013. Operating profits are expected to increase 168.0% to
¥620 billion, net profits are anticipated to rise 122.2% to ¥470
billion and earnings per share are expected to be ¥260.78 for the
year.
Our Take
Honda is a leading manufacturer of automobiles and the largest
manufacturer of motorcycles in the world. It is the second largest
automaker in Japan following
Toyota Motor Corp.
(
TM
).
The company is recognized internationally for its expertise and
leadership in developing and manufacturing a wide variety of
products that incorporate its efficient internal combustion engine
technologies ranging from small general-purpose engines to
specialty sports cars. Currently, it retains a Zacks #4 Rank, which
translates to a short-term (1 to 3 months) rating of Sell.
($1 = JPY 79.31)
HONDA MOTOR (HMC): Free Stock Analysis Report
TOYOTA MOTOR CP (TM): Free Stock Analysis
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