Honda Earnings Down 4.3% in Q2

Honda Motor Co. Ltd. says consolidated earnings fell to ¥129.9 billion ($1.09 million) in its fiscal second quarter ended Sept. 30, a 4.3% drop from year-ago.

Net sales totaled ¥2.63 trillion ($22.3 billion), up 12.5% from like-2005. Part of that gain is a result of favorable currency exchange rates due to a weakened yen. Had rates gone unchanged, Honda says its revenues would have risen only 7.2%.

Revenue increased 12.5% in North America to ¥1.4 trillion ($12.1 billion), 16.4% in Europe to ¥310.7 billion ($2.6 billion) and 9.0% in Japan to ¥1.17 trillion ($9.97 billion), Honda says.

Operating income rose 18.6% to ¥193.0 billion ($1.6 billion), primarily due to higher revenue, yen depreciation and cost cutting, Honda says. Those factors helped offset the negative impact of a less lucrative model mix, soaring raw-material costs and hikes in research and development expenses, the auto maker says.

Vehicle sales rose 6.0% to 884,000 units, despite a 6.6% drop to 171,000 in Japan. Overseas sales jumped 9.5% to 713,000 units to offset that decline.

Operating income from automotive operations increased 29.5% to ¥130.8 billion ($1.1 billion), Honda says.

For the first half of the fiscal year, Honda’s net income totals ¥271.3 billion ($2.3 billion), up 11.0% from year-ago. Revenue for the period, at ¥5.2 trillion ($44.4 billion), is up 13.7%.

Honda says it expects earnings for the full fiscal year ending March 31 to reach ¥555 billion ($4.7 billion) on net revenue of ¥11.0 trillion ($92.3 billion)