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The Spaminator
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Honda's quarterly profit plunges 38% on earthquake, lower demand
April 28, 2011
Automotive News

TOKYO (Bloomberg) -- Honda Motor Co. reported a quarterly profit that missed analysts' estimates, after Japan vehicle sales dropped and last month's record earthquake disrupted output.

The automaker said net income plunged 38 percent to 44.5 billion yen ($545 million) for the fiscal fourth quarter that ended March 31, lower than the 93.8 billion yen average of analysts' estimates compiled by Bloomberg. Sales fell 2.9 percent to 2.2 trillion yen.

Honda and rival Japanese carmakers are working to restore full operations after last month's earthquake and tsunami damaged parts factories and power plants, causing shortages of components and electricity. Honda said earlier this week it expects its global output to return to normal levels by the end of the year.

"Even if production comes back, sales may not," said Yuuki Sakurai, president at Fukoku Capital Management Inc. in Tokyo. "May sales, June sales may be close to zero as the companies won't have much to sell."

Honda declined to provide a full-year earnings forecast citing the impact of the natural disaster on production.

North America sales up

Honda's global vehicle sales dropped 1.6 percent to 860,000 in the three months ended March 31. The drop was led by a 22 percent decline in Japan. Sales in North America rose 7.9 percent to 356,000 and in Asia, excluding Japan, deliveries rose 0.4 percent to 238,000.

The automaker's March output in Japan plunged 63 percent to 34,754 vehicles, it said earlier this week. A government subsidy program for car purchases boosted sales a year earlier. The company's output of cars and parts in Japan will remain at 50 percent of regular capacity until the end of June.

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