April 27 - Honda Motor snaps a five-quarter streak of sliding profits, forecasts 170 percent surge in full-year earnings. Arnold Gay reports.
Honda's $1.4 billion in operating profit is more than double what it made a year ago, and ends a five-quarter streak of profit slides. Japan's number three automaker is also forecasting a near 170 percent surge in full-year earnings, as it leaves a string of major setbacks behind. Director Fumihiko Ike says Honda's recovery is well underway. (SOUNDBITE) (Japanese) SENIOR MANAGING OFFICER AND DIRECTOR OF HONDA MOTOR, FUMIHIKO IKE, SAYING: "Sales of our 4-wheel vehicles, were greatly boosted by the release of new models as well as the recovery from the earthquake disaster and Thai floods." Honda was the last Japanese automaker to get its supply chain in order after the massive earthquake last year, and was alone in having one of its factories inundated by Thailand's floods in October. Honda calls it the toughest period in its 64-year history. But work at its Thai plant finally resumed late last month, and its dominant and profitable motorcycle business has helped it cope. Executive VP Iwamura Tetsuo says a recovery in the U.S. auto market has also made a difference. (SOUNDBITE) (Japanese) EXECUTIVE VICE PRESIDENT IWAMURA TETSUO SAYING: "In North America, sales are recovering gradually. In China and other Asian markets, we expect a boost in sales exceeding the market average due to expansion into new market segments." Honda also has a globally spread-out manufacturing footprint that cushioned the impact of the strong yen. Honda exported just 35 percent of its cars from Japan last year, compared to 54 percent for Toyota and 62 percent for Nissan. Honda admits it let down its guard during the previous decade of rapid expansion, and will be under intense scrutiny to redeem itself with new models this fall. Arnold Gay, Reuters.