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Honda has announced earnings of $545 million for its fiscal fourth quarter, down 38 percent versus last year and less than half of analysts' $1.15 billion expectation. Honda's profit drop comes as the automaker brought in $27 billion in sales, down 2.9 percent from last year's fourth quarter.
Honda's results were weighed down by the March 11 earthquake and tsunami that derailed most March production in Japan. The automaker's Japan sales dropped 22 percent on the quarter, but a 7.9 percent sales increase in North America helped make up for most of the losses in its home country. Overall sales were down 1.6 percent to 860,000 units.
The earthquake reportedly cost Honda $560 million for the quarter, but the long-term effects could be far greater. The Japanese automaker doesn't expect production to return to normal until the end of the year, which could have devastating consequences for sales and profits. Frighteningly, Automotive News reports that Yuuki Sakurai, president of Fukoku Capital Management, says that even as production comes back sales may not, adding "May sales, June sales may be close to zero as the companies won't have much to sell."
The fourth quarter may have fallen short of expectations, but for the year Honda more than doubled its profits to $6.57 billion.