Honda Motor Co. Ltd.
) posted a 46.4% rise in earnings to ¥120.3 billion ($1.23
billion) or ¥66.79 (68 cents) per share in the second quarter
(ended Sep 30, 2013) of fiscal 2014 from ¥82.2 billion or ¥45.63
(46 cents) in the same quarter of the prior fiscal year.
Consolidated net sales and other operating revenues grew 27.3%
to ¥2.89 trillion ($29.6 billion). The increase was attributable
to higher revenues in the automobile and motorcycle business
operations as well as favorable foreign currency translation
Consolidated operating profit surged 70% to ¥171.4 billion
($1.75 billion) from ¥100.8 billion in the second quarter of
fiscal 2013, driven by higher sales volume and model mix along
with favorable foreign currency effects, partially offset by
higher SG&A expenses.
Revenues in the Automobile segment rose 26.2% to ¥2.23
trillion ($22.8 billion) on a 6.5% rise in consolidated unit
sales to 869 thousand vehicles and favorable foreign currency
translation effects. Operating profit surged 115.8% to ¥80.1
billion ($820 million) on the back of increased sales volume and
model mix and favorable foreign currency effects, partially
offset by increased SG&A expenses.
Revenues in the Motorcycle segment scaled up 35% to ¥418
billion ($4.3 billion), owing to higher consolidated unit sales
and favorable foreign currency translation effects. Consolidated
unit sales rose 12.2% to 2.6 million motorcycles. Operating
profit surged 79.3% to ¥45.5 billion ($466 million) on improved
sales volume and model mix along with favorable foreign currency
effects, partially offset by higher SG&A and R&D
Revenues in the Financial Services segment increased 30.4% to
¥170 billion ($1.7 billion) due to higher revenues from operating
leases and favorable foreign currency translation effects.
Operating income rose 21.7% to ¥46.5 billion ($477 million),
attributable to favorable foreign currency effects.
Revenues in the Power Product and Other segment escalated
12.6% to ¥73.1 billion ($748 million) driven by favorable foreign
currency translation effects. Unit sales in the segment inched up
0.5% to 1.3 million. The segment incurred operating loss of ¥0.8
billion ($8 million), due to increased SG&A expenses in other
Consolidated cash and cash equivalents declined to ¥1.13
trillion as of Sep 30, 2013 from ¥1.21 trillion as of Mar 31,
2013. Total debt amounted to ¥5.4 trillion as of Sep 30, 2013,
translating into a long-term debt-to-capitalization ratio of
49.6%, compared with ¥4.9 trillion or 49.2% as of Mar 31,
In the first half of fiscal 2014, cash flow from operations
improved to ¥671.5 billion from ¥323.3 billion in the first half
of fiscal 2013, primarily as a result of higher cash receipts due
to better automobile sales, which offset the increase in payments
for parts and raw materials. Meanwhile, capital expenditures
increased to ¥356 billion from ¥282.3 billion in the first half
of fiscal 2013.
For fiscal 2014, Honda has projected revenues to increase
22.5% to ¥12.1 trillion. Operating profit is expected to surge
43.2% to ¥780 billion and profits are anticipated to jump 58% to
¥580 billion or ¥321.81 per share. The company expects higher
revenues, favorable model mix, effective cost reduction measures,
favorable currency effect and favorable impact of raw material
cost fluctuations to contribute to the increase in profits during
Honda's Board announced quarterly dividend of ¥20 per share to
shareholders of record as of Sep 30, 2013. The company is
expected to make annual dividend payment of ¥80 per share in
Honda is a leading manufacturer of automobiles and the world's
largest manufacturer of motorcycles. It is the second largest
automaker in Japan following
Toyota Motor Corp.
) and has global operations like another Japanese automaker
Nissan Motor Co. Ltd.
). Currently, shares of Honda retain a Zacks Rank #2 (Buy).
Apart from Honda,
) is worth a look in the same industry, with a Zacks Rank #1
DAIMLER AG (DDAIF): Get Free Report
HONDA MOTOR (HMC): Free Stock Analysis Report
NISSAN ADR (NSANY): Get Free Report
TOYOTA MOTOR CP (TM): Free Stock Analysis
To read this article on Zacks.com click here.