Thursday, February 8, 2024
Japan's Honda Motor (7267.T), opens new tab reported a sharp rise in operating profit for the December quarter and lifted its annual outlook, helped by robust sales in the United States, a more profitable product mix and a weaker yen.
The automaker raised its full-year operating profit forecast by 4.2% to 1.25 trillion yen ($8.4 billion), versus an earlier estimate of 1.2 trillion yen and an average analyst forecast of 1.271 trillion yen, according to LSEG data.
For the October-December third quarter, operating profit rose 35% to 379.8 billion yen, in line with the average estimate of 371.6 billion yen in a poll of nine analysts by LSEG.
Honda also announced a $336 million share buyback, saying it would purchase up to 0.7% of its own shares.
Honda said last month its global sales grew 5.6% to nearly 4.0 million vehicles in 2023, lifted by a 33% jump in sales in the United States and marking its first sales growth in its biggest market in eight years as the shortage of high-tech chips abated.
In contrast, it saw a 10% sales slump in China to 1.2 million vehicles amid intense competition from newer Chinese auto brands.
Honda will have to optimise its manufacturing capacity in China and avoid ending up with excess production capacity after it brings online two new plants for building battery-powered vehicles, CFO Eiji Fujimura told a press briefing.
Honda, a laggard in the shift to battery-powered electric vehicles, unveiled plans last month to launch a new EV series from 2026, showing off two concept EVs at the CES trade show in Las Vegas.
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