Honda post fourth quarter net income drop

Japanese carmaker Honda has placed the blame for poor fourth quarter profits on higher taxes and increased operating costs.

Despite selling more cars over the three-month period to March 31st 2008 compared to last year - over a million during the quarter, a 9.8 per cent rise from last year - the automobile maker posted a consolidated net income of JPY25.4 billion from JPY176.2 billion in 2007.

Consolidated income before income taxes, minority interest and equity in income of affiliates for the quarter totalled JPY146.8 billion, a decrease of 38.6 per cent from the same period in 2007.

Sales incentives in North America, increased raw material costs, depreciation expenses and the appreciation of the Japanese yen all offset the increased car sales and efforts to cut costs.

Overseas unit sales increased 12 per cent to 860,000 units from last year, but the strong yen and the weak dollar led to a three per cent decline in revenue from external customers to JPY2,356 billion.

Motorcycle sales were down ten per cent over the quarter.

For the full year, Honda posted a 13 per cent increase in pre-tax profit to JPY895.84 billion, compared to JPY792.87 billion in 2007.

For the year to 2009, Honda predicts sales will be up slightly by 1.1 per cent, but net income will be down 18.3 per cent to JPY490 billion.