Honda posts surprise quarterly loss, dragged down by Takata recalls
TOKYO -- Honda Motor Co. posted a surprise net loss for its most recent quarter as its quality-related costs -- mostly to recall Takata-made airbag inflators -- nearly quadrupled for the full business year.
For the three months ended March 31, Japan's third-largest automaker by sales posted a loss of 93.4 billion yen ($859.56 million). That's compared with earnings of 81.9 billion yen during the same quarter last year.
Total revenue grew 4.7 percent to 3.6 trillion yen, the automaker said in a statement today.
Honda said its full-year results absorbed the impact of roughly 267 billion yen more in quality-related costs than its original estimate after U.S. regulators ordered an expansion of recalls to replace potentially deadly airbag parts made by Takata Corp.
The company said it had set aside a total 436 billion yen for airbag-related costs in the last business year, versus 120 billion yen in the previous year.
Honda, meanwhile, will recall 21 million more vehicles to replace Takata airbags, Executive Vice President Tetsuo Iwamura told reporters.
Airbag inflators made by Takata have been blamed for at least 13 deaths globally, mostly on cars made by Honda, the supplier's biggest customer. U.S. authorities said earlier this month that Takata must file new defect reports covering 35-40 million additional inflators that will lead to recalls by automakers.
Still, Honda forecast a 13.2 percent rise in net profit for the current year, with brisk global auto sales expected to offset the negative impact of a stronger yen.
Honda said it expected group profit for the year ending March to rise to 390.0 billion yen ($3.59 billion) from the previous year's 344.5 billion yen.
Honda assumes the dollar will average 105 yen this year, compared with last year's average of 120 yen. A stronger yen weighs on the repatriated value of profit earned overseas.
Bloomberg and Automotive News contributed to this report.