Honda Motor Co., Ltd. Reports Consolidated Financial Results For The Fiscal Third Quarter And The Nine Months Ended December 31, 2003
Honda Motor Co., Ltd. today announced its consolidated financial results for the fiscal third quarter and the nine months ended December 31, 2003.

Third Quarter Results

Honda's consolidated net income for the fiscal third quarter ended December 31, 2003 totaled JPY 151.0 billion (USD 1,410 million), an increase of 31.2% from the corresponding period in 2002. Basic net income per Common share for the quarter amounted to JPY 158.66 (USD 1.48), compared with JPY 118.63 for the same period in 2002. Two of Honda's American depositary shares represent one Common share.

Unit sales in all of Honda's business categories, namely motorcycles, automobiles and power products, increased during the fiscal third quarter and consolidated net sales and other operating revenue (herein referred to as "revenue") for the quarter amounted to JPY 1,992.2 billion (USD 18,597 million), remaining unchanged from the corresponding period in 2002.

Revenue included currency translation effects, which had a negative impact on foreign currency denominated revenue from Honda's overseas subsidiaries translated into yen. Honda estimates that had the exchange rate of yen remained unchanged from the same period in 2002, revenue for the quarter would have increased by approximately 6.3%.

Consolidated operating income for the fiscal third quarter totaled JPY 161.1 billion (USD 1,504 million), an increase of 1.4% compared with the corresponding period in 2002. This increase in operating income was primarily due to increased profit coming from higher revenue and Honda's ongoing cost reduction, offsetting negative impacts, such as appreciation of the yen and increase in research and development (R&D) expenses.

Consolidated income before income taxes for the quarter totaled JPY 203.5 billion (USD 1,900 million), an increase of 28.3% from the corresponding period in 2002.

Nine-Month Results

Honda's consolidated net income for the fiscal nine months ended December 31, 2003 totaled JPY 390.2 billion (USD 3,643 million), an increase of 25.9% from the previous year. Basic income per Common share for the fiscal nine months amounted to JPY 407.87(USD 3.81), compared with JPY 318.59 for the corresponding period a year ago.

Revenue for the fiscal nine-month period amounted to JPY 6,017.6 billion (USD 56,172 million), an increase of 3.0% from last year.

Revenue included the negative effect of currency translation, and Honda estimates that if the exchange rate of the yen had not changed from the previous year, revenue for the year would have increased by approximately 6.7%.

Consolidated operating income for the fiscal nine months totaled JPY 463.0 billion

(USD 4,322 million), a decrease of 4.1% compared with the corresponding period last year. This decrease in operating income was primarily due to negative impacts, such as appreciation of the yen, an increase in selling, general and administrative (SG&A) expenses and research and development (R&D) expenses, which offset increased profit from higher revenue and continuing cost reduction.

Consolidated income before income taxes for the fiscal nine months totaled JPY 535.4 billion (USD 4,998 million), an increase of 23.8% compared with the previous year.

With respect to Honda's sales for the fiscal nine months by business segment, motorcycle unit sales increased 9.5% to 6,586,000 units. In Japan, unit sales decreased 2.9% to 300,000 and overseas unit sales increased 10.2% to 6,286,000. Revenue decreased 1.9% to JPY 701.4 billion (USD 6,548 million). This decrease in revenue was due primarily to appreciation of the yen. Operating income also decreased 58.9% to JPY 15.6 billion (USD 146 million).

Honda's unit sales related to automobiles for the fiscal nine months increased by 3.9% to 2,190,000 units. Of them, unit sales in Japan decreased 19.4% to 506,000, and overseas unit sales increased 13.8% to 1,684,000.

Revenue also increased 3.6% to JPY 4,897.7 billion (USD 45,718 million), due to increase in overseas unit sales, which offset the negative impact of appreciation of the yen.

Operating income decreased 1.3% to JPY 385.5 billion (USD 3,599 million).

Revenue from financial services increased 4.1% to JPY 187.2 billion (USD 1,748 million).

Operating income increased 14.2% to JPY 55.6 billion (USD 520 million).

For power products, unit sales in Japan totaled 354,000 units, remaining unchanged from the same period last year, and overseas unit sales increased 15.5% to 2,905,000. In total, unit sales for power products for the fiscal nine months was up by 13.6% to 3,259,000 compared with the previous year. Revenue from power product and other businesses increased by 5.0% to JPY 241.7 billion (USD 2,257 million). Operating income increased 7.9% to 6.1 billion (USD 58 million).

With respect to Honda's sales for the fiscal nine months by geographic segment, in Japan, revenue decreased 2.6% to JPY 2,849.3 billion (USD 26,597 million), due mainly to decreased unit sales in motorcycle and automobile businesses. Operating income decreased 29.5% to JPY 108.1 billion (USD 1,010 million).

In North America, revenue increased 2.7% to JPY 3,552.7 billion (USD 33,163 million), due to strong sales in automobile and power product businesses, which offset negative impact of appreciation of the yen. Operating income decreased 2.0% to JPY 270.4 billion (USD 2,525 million).

Both revenue and operating income in Europe for the fiscal nine months increased by 17.9% to JPY 658.4 billion (USD 6,146 million), and 405.7% to JPY 18.8 billion (USD 176 million), respectively. This increase was due mainly to increased unit sales in automobile business, as well as a positive impact of currency translation effects.

In Asia, due to continued strong sales in motorcycle and automobile businesses, revenue increased by 35.1% to JPY 499.3 billion (USD 4,662 million). Operating income also increased 14.7% to JPY 35.0 billion (USD 328 million).

Revenue from Other regions for the fiscal nine months increased 21.9% to JPY 255.0 billion (USD 2,381 million), due mainly to increased unit sales in automobile, motorcycle and power product businesses, which offset the negative impact of currency translation effects. Operating income decreased 5.6% to JPY 19.4 billion (USD 181 million).

Forecasts for the fiscal year ending March 31, 2004

FY2004 Forecasts for consolidated results

.

In billions of yen

.

Changes from FY 2003

Net sales and other operating revenue

8,100

+1.6%

Income before income taxes

648

+6.3%

Net income

473

+10.9%


FY2004 Forecasts for unconsolidated results

.

In billions of Yen

.

Changes from FY2003

Net sales

3,320

- 0.1%

Ordinary profit

276

+13.7%

Net income

201

+18.2%

These forecasts are based on the assumption that the exchange rates for the yen to the U.S. dollar and the euro for the fourth quarter will average JPY 105 and JPY 130, respectively; the current fiscal year, JPY 112 and JPY 132, respectively ; and Honda's transaction rates, JPY 114 and JPY 129, respectively.

This announcement contains forward-looking statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934. Honda's actual results could materially differ from those contained in these forward-looking statements as a result of numerous factors outside of Honda's control. Such factors include general economic conditions in Honda's principal markets, foreign exchange rates between the Japanese yen and other major currencies, as well as other factors detailed from time to time in Honda's reports filed with the U.S. Securities and Exchange Commission.

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