Despite Record Sales, Honda Profits Are Down
April 26, 2007 · Posted in Uncategorized
Honda Motor Company posted a 20% loss in the last fiscal quarter. According to the Detroit News, the Japanese automaker saw profits slide despite doing a record business – global sales rose 9%.
So why the downturn?
Apparently, in 2006 Honda was the beneficiary of certain "pension reimbursements" from the Japanese government. These payments coupled with lower material costs and R&D expenses are all credited for giving the carmaker an added boost last year that is notably absent in this year's fiscal spreadsheets. Hence the 20% loss despite sales increases.
But don't feel too sorry for the Big H. The auto giant did a robust business last year which netted the company a cool $5 Billion profit.
[Source: Detroit News]
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