Published October 28, 2012
TOKYO – Japan's Honda Motor Co <7267.T> cut its full-year net profit forecast by a fifth after sales in China, the world's biggest autos market, were hit by a popular backlash against Japanese products last month in a dispute over East China Sea islands.
Honda cut its net profit forecast for the year to March to 375 billion yen ($4.7 billion) from its earlier estimate of 470 billion yen.
Net profit for July-September rose 36.1 percent to 82.2 billion yen ($1.03 billion), but was some way below the average estimate of 107.2 billion yen from six analysts polled by Thomson Reuters I/B/E/S. A year ago, Japanese manufacturers were still reeling from the March earthquake and tsunami.
Honda released its quarterly earnings three hours earlier than planned, after accidentally posting the results on its website. It quickly took down the numbers, but was told by the Tokyo Stock Exchange to bring forward the full announcement.
Demand for Honda, Toyota Motor <7203.T> and Nissan Motor <7201.T> cars slumped in China amid violent protests over the territorial dispute, with South Korea's Hyundai Motor <005380.KS> and Germany's BMW picking up market share.
Sales by Honda and its China joint ventures dropped 40.5 percent in September. China is Honda's second-biggest market after the United States, accounting for 17 percent of its 2011 global sales.
Honda's quarterly profits were dented by start-up and advertising costs for the new Accord sedan, which went on sale in the United States in September, but the refresh helped Japan's third-biggest automaker increase its share of the U.S. car and light truck market to 8.7 percent in September.
Honda shares, valued at around $59 billion, fell 15 percent to near 9-month lows amid the China protests, but have since recovered, helped in part by a weaker yen. The stock was up 0.2 percent at 2,520 yen at the midday break.
The fallout from the Japan/China dispute could, however, still run into the current and fourth quarters, analysts have warned.
Toyota and Nissan report their quarterly earnings on November 5 and November 6, respectively.
($1 = 79.5600 Japanese yen)
(Reporting by Yoko Kubota; Editing by Ian Geoghegan)