Economy

Honda profit slips on air-bag woes despite sales growth

Consolidated sales revenue for the quarter amounted to 3.776 trillion yen or $33.50 billion, an increase of 15.7% from the same period previous year, due primarily to increased revenue in all business operations as well as favorable foreign currency translation effects.

Operating profit fell by a third to 152.9 billion yen ($1.36 billion) in the company's fiscal second quarter ended September 30, from 228.0 billion yen ($2.03 billion) a year earlier.

Net income declined 1.7 percent to 174.0 billion yen ($1.55 billion) in the three months, the company said Wednesday while announcing fiscal second quarter financial results.

Operating profit was hit by a 53.7 billion yen ($477.2 million) charge to a settle class action lawsuit in the USA brought by customers of cars with defective Takata airbag inflators.

Offsetting those lower sales are booming sales in China, the world's largest auto market, where Honda sold 1.03 million vehicles in January-September, up 18 percent from the same period previous year.

On a group basis, Honda sold 452,000 vehicles in North America in the quarter, down from 479,000 units a year earlier.

Quarterly sales jumped almost 16 percent on-year to 3.78 trillion yen ($33 billion), according to the Tokyo-based maker of the Accord compact, Odyssey minivan and Asimo robot.

While litigation settlement weighed on operating profit for the quarter, Honda raised its full-year forecast based on a revised assumption of the yen trading around 109 yen to the USA dollar.

Honda now expects the yen to average 109 to the dollar in the current business year, much cheaper than the 107 projected earlier.

The forecast still represents an 11.4 percent slide from past year. Some 100 million air-bag inflators were recalled worldwide.



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