JAL net profit falls on fuel cost

Honda Motor Co, Japan’s third largest carmaker, reported profit that missed analysts’ estimates after sales in its home market fell 24%.

Net income fell 7% to 122.5 billion yen (US$1.25bil) in the three months ended June 30, from 131.7 billion yen a year earlier, the Tokyo-based company said in a statement yesterday. That lagged behind the 149.3 billion yen-average of three analyst estimates compiled by Bloomberg.

Honda maintained its forecast for full-year profit to rise 58% to 580 billion yen as the weaker yen boosts the value of overseas earnings.

The automaker’s sales growth in the United States, its biggest market, lagged behind the industry’s, contributing to the first-quarter result, according to figures from Autodata Corp, an industry researcher.

“Honda’s sales should improve in the second half, when the new Fit compact will be delivered,” Satoru Takada, a Tokyo-based analyst at Toward the Infinite World Inc, said before the results.

“Honda’s US sales are fairly good, but the company is hampered by a lack of pick-up trucks and lower sales of aging SUVs like the Odyssey.”

Honda declined 2.2% to close at 3,630 yen in Tokyo trading, before the company reported earnings.

In the quarter ended June, deliveries in Japan fell to 140,000 vehicles, compared with 185,000 a year earlier. In the United States, they rose 7.1% to 407,927 units, according to the carmaker.

The maker of Civic and Accord sedans kept its forecasts for revenue of 12.1 trillion yen and operating profit of 780 billion yen in the year ending March 31. It also kept its projection for deliveries at 4.43 million units.

Nissan Motor Co, Japan’s second biggest automaker, last week reported net income rose 14% to 82 billion yen last quarter. Toyota Motor Corp, Japan’s largest automaker, is scheduled to report earnings tomorrow. The company may report first-quarter net income of 430.2 billion yen, according to the average of four analyst estimates compiled by Bloomberg.

Japanese carmakers have benefited from the cheapening yen, which has fallen 11% against the dollar this year. A weaker yen increases the value of overseas earnings at Japanese companies when converted to the local currency. — Bloomberg

Japan Airlines Co, the nation’s second largest carrier, posted a 32% decline in firstquarter profit, as a weaker yen pushed up fuel cost and sales were damped by the Boeing Co 787 grounding.

Net income fell to 18.3 billion yen (US$187mil) in the three months ended June 30, from 26.9 billion yen a year earlier, Tokyobased JAL said in a statement yesterday. Sales rose to 294.1 billion yen from 286.7 billion yen.

Groundings of the Dreamliner fleet by JAL and ANA Holdings Inc, the biggest operators of the jet, for more than four months crimped sales at the carriers. The Japanese currency’s 5% decline during the quarter also pushed up costs as the airlines purchase jet fuel in dollars. — Bloomberg