S&P 500   3,978.73
DOW   32,120.28
QQQ   291.26
S&P 500   3,978.73
DOW   32,120.28
QQQ   291.26
S&P 500   3,978.73
DOW   32,120.28
QQQ   291.26
S&P 500   3,978.73
DOW   32,120.28
QQQ   291.26

Japan's Honda sees profit slide on chips, material cost woes

Friday, May 13, 2022 | Yuri Kageyama, AP Business Writer

People walk near the logo of Honda Motor Company at a showroom Friday, May 13, 2022, in Tokyo. Honda’s fiscal fourth quarter profit slipped to almost half of what the Japanese automaker earned the previous year amid headwinds of supply shortages and rising raw material costs. (AP Photo/Eugene Hoshiko)

TOKYO (AP) — Honda’s fiscal fourth quarter profit slipped to almost half of what the Japanese automaker earned the previous year as it endured supply shortages and rising raw materials costs.

Tokyo-based Honda Motor Co. reported Friday that its profit was 124.8 billion yen ($967 million) in the January-March quarter, down 41% from 213.3 billion yen a year earlier. Quarterly sales edged 7% higher to 3.88 trillion yen ($30 billion).

Honda said it is cutting costs but acknowledged continuing uncertainty over supplies and production for various reasons, such as Chinese lockdowns to battle coronavirus outbreaks.

The semiconductor shortage has hurt sales, despite strong demand for Honda models, the company said. Honda was securing alternative suppliers, it said.

“I deeply apologize for the problems we have caused for those customers graciously waiting for our cars,” Honda Chief Financial Officer Kohei Takeuchi said from its headquarters.

In the fiscal year that ended in March, Honda posted a 707 billion yen ($5.5 billion) profit, up 7.6% from 657 billion yen the year before. Sales totaled 14.6 trillion yen ($113 billion) sales, up 10.5% on year.

Honda, which makes the Accord sedan, Odyssey minivan and Civic compact, sold about 4 million vehicles for the fiscal year, down from 4.5 million vehicles. Vehicle sales dropped in Japan, the U.S. and the rest of Asia.

Motorcycle sales for the fiscal year increased 12.5% to 17 million motorcycles, as sales grew especially in Asia.

Honda is projecting a profit of 710 billion yen ($5.5 billion) for the fiscal year through March 2023, little changed from the fiscal year that just ended, as risks from rising costs of raw materials continue.

The problems affecting Honda have hurt all automakers. But Japan’s top automaker Toyota wrapped up a year of record earnings even though its profit for the January-March quarter declined compared to last year. Nissan Motor Co. returned to profitability for the first time in three years.

Like the rest of the industry, Honda has grown bullish on electric vehicles. It recently announced an investment of 5 trillion yen ($39 billion) over the next decade in such research. That includes a collaboration with General Motors Co. in North America to develop models going on sale in 2024.

Honda said recent volatility in foreign exchange rates was unhelpful and it hoped for more stability.

The yen is at a two-decade low against the U.S. dollar. A cheap yen has historically worked as boon for exporters like Honda by boosting the value of their overseas earnings when converted into yen. But it also increases costs for imported components and materials.

The potential impact on the global economy from the war in Ukraine also could hurt Honda's sales, Takeuchi said.


Yuri Kageyama is on Twitter https://twitter.com/yurikageyama

7 ESG Stocks that are Leading the Way to a Better World

It's becoming increasingly popular for investors to "vote their values." One way they do this is by investing in companies that make a demonstrable effort to improve the world. This is creating a category of stocks known as ESG stocks.

ESG stands for Environmental, Social, and Governance and it covers a broad range of issues. The environmental component is relatively straightforward. This analyzes and measures how companies address issues such as carbon emissions, deforestation, and green energy initiatives including sustainability efforts built into their supply chain.

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The focus of this presentation is to give you seven companies that are giving more than just lip service to ESG initiatives. One of the criteria used in selecting the stocks in this presentation was the company's Net Impact Ratio. This is calculated from data produced by the Upright Project's Net Impact Model.

The Net Impact Model is a mathematical model of the economy that produces continuously updated estimates of the net impact of companies by means of an information integration algorithm.  MarketBeat captures key insights and presents them under the "Sustainability" tab on the company's profile page.

View the "7 ESG Stocks that are Leading the Way to a Better World".

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Toyota Motor (TM)
2.7665 of 5 stars
General Motors (GM)
3.1583 of 5 stars
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