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Honda Motor Co., Ltd. Reports Consolidated Financial Results for the Fiscal First Quarter Ended June 30, 2010

Fri, 07/30/2010 - 1:28am
Manufacturing.net
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Honda Motor Co., Ltd. Reports Consolidated Financial Results for the Fiscal First Quarter Ended June 30, 2010

TOKYO, July 30 /PRNewswire-FirstCall/ -- Honda Motor Co., Ltd. (NYSE: HMC) today announced its consolidated financial results for the fiscal first quarter ended June 30, 2010.

FirstQuarter Results

Honda's consolidated net income attributable to Honda Motor Co., Ltd. for the fiscal first quarter ended June 30, 2010 totaled JPY 272.4 billion (USD 3,080 million), an increase of JPY 264.9 billion from the same period in 2009. Basic net income attributable to Honda Motor Co., Ltd. per common share for the quarter amounted to JPY 150.27 (USD 1.70), an increase of JPY 146.10 from JPY 4.17 for the corresponding period last year. One Honda American Depository Share represents one common share.

Consolidated operating income for the quarter totaled JPY 234.4 billion (USD 2,650 million), an increase of 831.7%, due primarily to the positive impact of increased revenue and model mix, reduction in vehicle costs as a result of increased production and continuing cost reduction efforts, despite increased R&D expenses and the unfavorable impact of currency effects.

Consolidated net sales and other operating revenue (herein referred to as "revenue") for the quarter amounted to JPY 2,361.4 billion (USD 26,689 million), an increase of 17.9% from the same period in 2009, due primarily to increased revenue in the automobile business, despite unfavorable currency translation effects.

With respect to Honda's automobile business segment, unit sales totaled 899 thousand units, an increase of 17.4% from the same period last year. In Japan, unit sales amounted to 145 thousand units, an increase of 13.3% from the same period last year. Unit sales outside of Japan increased 18.2% to 754 thousand units from the corresponding period last year, due mainly to increased unit sales in Asia and North America, more than offsetting decreased unit sales in Europe. Revenue from sales to external customers increased 19.0% to JPY 1,813.0 billion (USD 20,491 million) from the same period in 2009, due mainly to increased unit sales despite the unfavorable currency translation effects. Operating income was JPY 148.9 billion (USD 1,683 million), an increase of JPY 170.3 billion from the same period last year, due primarily to the positive impact of increased sales volume and model mix, reduction in vehicle costs as a result of increased production and continuing cost reduction efforts, despite increased SG&A expenses and R&D expenses and the unfavorable impact of currency effects.

Revenue from customers in the financial services business decreased 4.1% to JPY 149.4 billion (USD 1,690 million) from the same period in 2009, due mainly to unfavorable currency translation effects. Operating income increased 16.6% to JPY 54.6 billion (USD 618 million) from the same period in 2009, due primarily to the decreased allowance for losses on credit and lease residual values, despite the unfavorable impact of currency effects.

Motorcycle unit sales totaled 2,887 thousand units, an increase of 28.2% from the same period last year. Unit sales in Japan totaled 45 thousand units, which is the same level compared to the same period last year. Outside of Japan, total unit sales was 2,842 thousand units, an increase of 28.8% from the same period in 2009*, due mainly to increased unit sales in Asia, especially in India, Indonesia and Thailand, and Other regions including South America.  Revenue from sales to external customers increased 24.9%, to JPY 320.2 billion (USD 3,619 million) from the same period last year, due mainly to increased unit sales and favorable currency translation effects. Operating income increased 455.0% to JPY 31.3 billion (USD 354 million) from the same period last year, due primarily to the positive impact of increased sales volume and model mix and reduction in vehicle costs as a result of increased production.

*Of the net sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, those with respect to which parts for manufacturing were not supplied from Honda or its subsidiaries are not included in net sales and other operating revenue, in conformity with U.S. generally accepted accounting principles. Accordingly, these unit sales are not included in the financial results.  Sales of such products amounted to approximately 1,780 thousand units for the period.

**United States dollar amounts have been translated from yen solely for the convenience of the reader at the rate of JPY 88.48=U.S.$1, the mean of the telegraphic transfer selling exchange rate and the telegraphic transfer buying exchange rate prevailing on the Tokyo foreign exchange market on June 30, 2010.

Forecasts for the Fiscal Year Ending March 31, 2011

In regard to the forecasts of the financial results for the fiscal year ending March 31, 2011, Honda projects consolidated results to be as shown below:

The forecasts are based on the assumption that the average exchange rates for the Japanese yen to the U.S. dollar and the Euro will be JPY 87 and JPY 112, respectively, for the full year ending March 31, 2011.

Projected unit sales for the full year ending March 31, 2011

Unit

(thousands)

Changes from FY2010

(thousands)

Motorcycle business

10,820

+ 1,181

Automobile business

3,640

+ 248

Power product and Other businesses

5,545

+ 801

FY2011 Forecasts for Consolidated Results

Fiscal year ending March 31, 2011

Yen (billions)

Changes from FY 2010

Net sales and other operating revenue

9,100

+ 6.1%

Operating income

450

+ 23.7%

Income before income taxes and equity in income of affiliates

470

+ 39.8%

Net income attributable to Honda Motor Co., Ltd.

455

+ 69.5%

Yen

Basic net income attributable to

Honda Motor Co., Ltd. per common share

251.23

Dividend per Share of Common Stock

The Board of Directors of Honda Motor Co., Ltd., at its meeting held on July 30, 2010, resolved to make the quarterly dividend JPY 12 per share of common stock, the record date of which is June 30, 2010. The total expected annual dividend per share of common stock for the fiscal year ending March 31, 2011, is JPY 48 per share.

The Board of Directors, at its meeting held on July 30, 2010, resolved that the Company will purchase its own shares pursuant to Article 156 of the Company Law, which applies pursuant to Article 165, Paragraph 3, of that law.

(1) Type of shares and maximum number of shares to be acquired:

  Shares of Common Stock 12,000 thousand shares

(2) Maximum amount of acquisition:

  JPY 25 billion

(3) Period of acquisition:

  Starting on August 3, 2010 and ending on September 15, 2010

The Board of Directors, at its meeting held on July 30, 2010, resolved that the Company will retire its treasury stock pursuant to Article 178 of the Company Law.

(1) Type of shares and number of shares to be retired:

  Shares of Common Stock 23,400 thousand shares

(2) Total number of the shares outstanding after retirement

  1,811,428 thousand shares

(3) Scheduled date of retirement

  August 6, 2010

This announcement contains "forward-looking statements" as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Such statements are based on management's assumptions and beliefs taking into account information currently available to it.  Therefore, please be advised that Honda's actual results could differ materially from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in Honda's principal markets and foreign exchange rates between the Japanese yen and the U.S. dollar, the Euro and other major currencies, as well as other factors detailed from time to time. The various factors for increases and decreases in income have been classified in accordance with a method that Honda considers reasonable.

For Additional information, please visit; http://world.honda.com/investors/meeting/  where you can download presentation materials and financial results information.

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