Honda Motor Co.
) revealed a steep 61% increase in profits to ¥71.6 billion ($871
million) in the fourth quarter of the fiscal 2012 ended March 31,
2012 from ¥44.6 billion in the same quarter of prior fiscal year.
On per share basis, profits were ¥39.72 (48 cents) in the quarter
versus ¥24.72 in the prior year, missing the Zacks Consensus
Estimate of 62 cents.
Consolidated net sales and other operating revenues grew 9% to
¥2.4 trillion ($29.3 billion), despite unfavorable foreign currency
translation effects. The improvement was attributable to higher
revenues from motorcycle and automobile businesses.
Consolidated operating profit more than doubled to ¥112.0
billion ($1.4 billion) from ¥46.2 billion in the fourth quarter of
fiscal 2011, driven by increase in sales volume and model mix and
lower selling, general and administrative (SG&A) expenses,
despite higher research and development (R&D) expenses and
unfavorable foreign currency effect.
Revenues in the
segment rose 12% to ¥1.8 trillion ($22.4 billion) on a 15% rise in
unit sales to 988 thousand vehicles. The automaker saw higher unit
sales in North America and Japan that more than offset lower unit
sales in Asia on the back of severe flooding in Thailand in the
second half of 2011. Operating profit amounted to ¥45.1 billion
($549.0 million), an increase of ¥84.3 billion ($1.0 billion) from
a loss of ¥39.2 billion in the prior year driven by higher sales
volume and better model mix, and lower SG&A expenses, despite
increased R&D expenses and unfavorable foreign currency
Revenues in the
segment inched up 1.5% to ¥358.5 billion ($4.4 billion) on an 18%
rise in unit sales to 3.5 million motorcycles, driven by higher
sales in Asia and other regions including South America. Operating
profit dipped 32% to ¥32.9 billion ($400 million) from ¥48.1
billion a year ago due to an adverse impact of a one-time gain
related to licensing agreements in the fourth quarter of fiscal
2011, higher SG&A expenses and unfavorable foreign currency
effects, which more than offset the positive impact from higher
sales volume and better model mix.
segment slid 4% to ¥129.0 billion ($1.6 billion) due to unfavorable
foreign currency translation effects. Operating income fell 9% to
¥36.0 billion ($438.0 million) from $40.0 billion a year ago due to
the increased allowance for losses on credit and the unfavorable
foreign currency effects.
Power Product and Other
segment ebbed 9% to ¥72.5 billion ($883.0 million) driven by lower
revenues in other businesses and unfavorable currency translation
effects. However, unit sales in the segment rose 15% to 2.0 million
due to strong demand in North America and Asia. The segment had a
narrower operating loss of ¥2.0 billion ($25.0 million) compared
with ¥2.4 billion in the prior year, driven by higher sales volume
and model mix, despite increased SG&A expenses.
In fiscal 2012, Honda reported a sharp 60% decline in profits to
¥211.5 billion ($2.6 billion) from ¥534.1 billion in the prior
year. On per share basis, profits fell to ¥117.34 ($1.43) from
¥295.67 in the prior year.
Consolidated revenues in the year tumbled 11% to ¥7.9 trillion
($96.7 billion), driven by lower revenues from the automobile
business caused by temporary suspension of production and
adjustments in production on the back of earthquake in Japan and
flooding in Thailand in 2011 as well as unfavorable foreign
currency translation effects, despite higher revenues in the
Consolidated operating profit for the year slashed 59% to ¥231.4
billion ($2.8 billion) from ¥569.8 billion in the prior year,
driven by lower sales volume and model mix, higher R&D expenses
and unfavorable foreign currency effects, despite a fall in
Consolidated cash and cash equivalents were ¥1.2 trillion ($15.1
billion) as of March 31, 2012, a decline from ¥1.3 trillion as of
March 31, 2011. Long-term debt amounted to ¥4.1 trillion ($49.7
billion) as of March 31, 2012, translating into a long-term
debt-to-capitalization ratio of 48%, which was flat compared with
the year-ago level.
In the fiscal year, cash flow from operations deteriorated to
¥737.4 billion ($8.9 billion) from ¥1.1 trillion in the fiscal
2011, primarily due to a fall in profits. Meanwhile, capital
expenditures increased to ¥397.2 billion ($4.8 billion) from ¥318.5
billion in fiscal 2011.
For fiscal 2012, Honda has projected revenues to increase 30% to
¥10.3 trillion. Operating profit is expected to jump 168% to ¥620
billion and profits are anticipated to surge 122% to ¥470 billion
or ¥260.78 per share. The company expects higher revenues,
favorable model mix and effective cost reduction measures to
contribute to the increase in profits during the year.
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.
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".
HONDA MOTOR (
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