TOKYO – Honda’s operating profit jumped 78 percent in the latest quarter as improved semiconductor supply fed North American production and boosted the Japanese automaker’s sales.
Operating profit climbed to 394.4 billion yen ($2.73 billion) in the company’s fiscal first quarter ended June 30, compared with 222.2 billion yen ($1.54 billion) a year earlier, Honda said in its financial results on Wednesday.
Net income more than doubled to 363.0 billion yen ($2.51 billion), from 149.2 billion yen ($1.03 billion) the year before.
Revenue climbed 21 percent to 4.62 trillion ($31.96 billion) in the three-month period, while global sales increased 11 percent to 901,000 vehicles in the quarter.
Deliveries in the U.S., Honda’s biggest market, soared 45 percent to 347,000 vehicles, helping power Honda through the quarter. Sales fell 5 percent in China to 309,000 units, and deliveries in Europe declined 13 percent to 20,000 vehicles.
Honda credited the U.S. rebound to a recovery in factory output as the auto industry bounces back from the global semiconductor shortage.
“In the U.S. the semiconductor supply has improved, and our production has recovered accordingly,” said Masaharu Hirose, general manager of Honda’s finance department.
Economic red flags
U.S. demand is especially robust for the Honda Accord sedan and Pilot crossover.
“They are selling well, even with low incentive levels, so they are selling briskly,” Hirose said.
Hirose said that the U.S. economy remains in “good shape” and that overall demand exceeds supply. But he also warned about signs of softening, including a decline in U.S. household savings rates and a gradual uptick in delinquent loan payments.
By contrast, Honda’s business in China suffered amid intensifying price competition in that country’s rapidly expanding market for electric vehicles.
Through June, Honda’s output in North American increased 27 percent to 767,121. In China, however, production slid 12 percent to 617,638 vehicles.
Looking ahead, Honda kept its earnings outlook unchanged for the current fiscal year ending March 31, 2024. It predicts operating profit will grow 28 percent to 1.0 trillion yen ($6.92 billion), while net income is forecast to rise 23 percent to 800.0 billion yen ($5.53 billion).
Worldwide sales are seen expanding 18 percent to 4.35 million units in the current fiscal year. North America should set the pace with a 38 percent increase to 1.65 million vehicles.
Naoto Okamura contributed to this report