Honda says its profits rose 28% in the second quarter of the fiscal year.
The carmaker forecasts an operating profit of £3.09 billion for the full year.
Honda wants to strengthen partnership with GM in North America.
Honda Motor Co. (TYO: 7267) said Friday that its profits rose 28% in the second quarter of the fiscal year as sales in China recovered quickly after months of stagnation due to the coronavirus pandemic. The company also raised its annual operating profit forecast by over 100%.
The company’s shares closed the regular meeting on Friday with a gain of about 2%. Honda Motor is now changing hands at £19 per share, up from the previous year’s low of £15.71 per share in March when the impact of COVID-19 was at its peak. Learn more about why stock market prices rise and fall.
Honda forecasts full year operating profit of £3.09 billion
The carmaker is now forecasting an operating profit of £3.09 billion for this year, compared with £1.47 billion it had previously estimated. According to Refinitiv, experts forecast an operating profit of £1.87 billion for Honda in the current financial year.
The Japanese multinational reported an operating profit of £2.08 billion in the second quarter of the financial year, compared with £1.62 billion in the same quarter last year. Peer Toyota Motor Corp. also more than doubled its full-year operating profit forecast on Friday.
According to Honda, it expects to sell 4.6 million vehicles this year, slightly above its previous forecast of 4.5 million. By comparison, last year the automaker sold 4.79 million vehicles.
Honda confirmed on Friday that it has committed itself to a greater switch to electric cars. In line with the plan, last month it launched the Honda e, its first mass-produced, fully battery-powered vehicle. For the year 2030, Honda is aiming for new energy vehicles to account for 2/3 of its total production.
Honda to strengthen partnership with GM in North America
For the United States the strategy is a little different. Honda wants to expand its presence in the SUV segment in this market, as there is a higher demand for larger, four-wheel drive vehicles in the USA.
In a September announcement, Honda said it was considering strengthening its partnership with General Motors in North America. The two companies are likely to jointly produce low-emission vehicles, sharing costs and technology.
Honda’s stock market performance last year was only moderately positive, with an annual profit of almost 4%. At the time of writing, Japan’s third largest automaker is valued at 34 billion pounds sterling and has a price-earnings ratio of 22.67.