Honda Motor Co
(
HMC
) posted strong Q1 results as production and sales reached
pre-quake levels. Of all the automakers, Honda was hurt the most
due to last year's natural disasters. Apart from the tragic
tsunami, floods in Thailand impacted the automaker's production and
supply chain negatively. Total revenues for the quarter jumped 42%
to 2,436 billion yen, or $31.2 billion while operating income for
the quarter stood at 176 billion yen. For fiscal 2013, Honda
forecasts its operating income to climb 168% to 620 billion yen
($7.9 billion).
We have a price estimate of $44 for Honda Motors
, and we are in the process of revising our estimates to
incorporate Q1 earnings.
Significantly Higher Volumes
Net income surged more than 300% to 131.7 billion
yen. Overall, Honda sold almost 60% more automobile units this
quarter than it did in the previous year quarter. Total
automobile sales doubled in Japan as well as North America. The
company reported operating margins for automobiles at 5.3%, which
is an improvement from 2.4% in the previous quarter and a negative
6.5% in the corresponding quarter last year. Japanese sales
were buoyed by the introduction of N-Box, Freed Hybrid and
Freed Spike Hybrid while sales in the North American region
were helped by increased production of Accord and Civic as well as
the introduction of new models such as
CR-V, RDX
and
ILX
. North America is Honda's biggest market in terms of the number of
vehicles sold. North American sales for the remainder of the year
will be contingent on how the new Accord (to be introduced later in
the year) will perform.
Asian automobile sales grew 22% helped by strong
City
sales in Thailand and
Brio
sales in India. Honda is betting on Asian countries such as
Indonesia and India
to fuel future growth. In Indonesia, the automaker is in the
process of expanding manufacturing capacity which will triple its
output to 180,000 vehicles from 60,000 currently. And, in India,
Honda is targeting to double the sales in the next four years
through the introduction of new models and aggressive
promotions.
Motorcycle sales jumped 12.5% to 3.9 million units, but
profitability was hurt due to a strong Yen. The company reported
margins dropped to 10.6% from 13.6% in the previous year. However,
on a sequential basis, the margins are still up highlighting that
Honda's process of recovery is under way.
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