Honda says its earnings jumped 28% in the fiscal second quarter
- Honda says its earnings jumped 28% in the fiscal second quarter.
- The automaker forecasts £3.09 billion of full-year operating profit.
- Honda to strengthen partnership with GM in North America.
Honda Motor Co. (TYO: 7267) said on Friday that its earnings jumped 28% in the fiscal second quarter as sales recovered quickly in China after months of halt due to the Coronavirus pandemic. The company also raised its guidance for annual operating profit by over 100%.
Shares of the company closed the regular session on Friday about 2% up. Honda Motor is now exchanging hands at £19 per share versus a year to date low of £15.71 per share in March when the impact of COVID-19 was at its peak. Learn more about why prices rise and fall in the stock market.
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Honda forecasts £3.09 billion of full-year operating profit
The car manufacturer now forecasts £3.09 billion of operating profit this year versus £1.47 billion that it had estimated earlier. According to Refinitiv, experts forecast £1.87 billion of operating profit for Honda in the ongoing financial year.
The Japanese multinational said that its operating in the fiscal second quarter came in at £2.08 billion as compared to £1.62 billion in the same quarter last year. Peer Toyota Motor Corp. also more than doubled its guidance for full-year operating profit on Friday.
According to Honda, it expects vehicle sales to print at 4.6 million this year, that is slightly above its previous prediction of 4.5 million. In comparison, the automaker had sold 4.79 million vehicles last year.
Honda reiterated on Friday that it was committed to switching increasingly to electric cars. In accord with the plan, it launched Honda e, its 1st mass-produced fully battery-operated vehicle last month. For 2030, Honda is targeting new-energy vehicles to make up 2/3rd of its total output.
Honda to strengthen partnership with GM in North America
The strategy is a little different for the United States. Honda wishes to expand its footprint in the SUV segment in this market, owing to a higher demand for all-wheel drive, larger vehicles in the U.S.
In an announcement in September, Honda said it was considering strengthening its partnership with General Motors in North America. Both companies are likely to jointly undertake the production of low-emission vehicles while sharing costs and technology.
Honda performed only modestly upbeat in the stock market last year with an annual gain of close to 4%. At the time of writing, Japan’s third-largest automaker is valued at £34 billion and has a price to earnings ratio of 22.67.