Honda reports 22% rise in Q3 operating profit, beating estimates

By Daniel Leussink

TOKYO (Reuters) -Japan’s Honda Motor Co on Friday posted a better-than-expected 22% rise in third-quarter operating profit, as a weak yen helped offset rising raw material costs and lower vehicle production and sales amid shortages of computer chips.

Operating profit for the three months to Dec. 31 stood at 280.4 billion yen ($2.13 billion). That compared with an average estimate of 239.4 billion yen in a poll of 11 analysts by Refinitiv, and a 229.4 billion yen operating profit the same period a year earlier.

The automaker faced setbacks in China from the spread of COVID-19 and the chip shortage in the third quarter, that extended into January with some of its dealers temporarily closing.

Sales in China in January were down about 50% from a year earlier, said Honda executive Eiji Fujimura.

“The impact was factored into our original plans,” he said, adding that sales were likely to recover from February.

While the automaker cut its group unit sales by 6.1% to 3.85 million vehicles from 4.1 million units, largely due to the headwinds faced in China, it stuck to its annual operating profit forecast of 870 billion yen for the year through March.

That compared with an 871.28 billion yen average forecast by 21 analysts.

Honda’s global automobile sales were down 8.7% for the first nine months of the fiscal year compared with the same period a year earlier, the company said.

($1 = 131.5500 yen)

(Reporting by Daniel Leussink; Editing by David Dolan, Robert Birsel)