Honda Motor Co. Ltd’s share price up, posts profit increase in the last quarter amid strong sales in Japan

The third-biggest car manufacturer in Japan – Honda Motor Co. Ltd reported today that its net income increased in the quarter from January to March 2014, boosted by sales in its home market that surged by 41%. The company also attributed the positive result to a weaker yen, but its full-year profit forecast missed analysts estimates as the benefits from the weakening Japanese yen started to fade.

Honda Motor Co. made an official statement today, revealing that its net profit in the quarter ended March 31st jumped from 75.76 billion yen in 2013 to 170.51 billion yen. The companys sales increased from 2.744 trillion yen to 3.097 trillion yen, and its operating profit soared to 165.29 billion yen from 135.99 billion in the same quarter last year.

The stable growth of the company can be attributed to the launch of both renewed and completely new vehicles on the Japanese and Chinese markets, as well as to the positive effects from a weaker yen.

The company projected that its net profit may rise by 3.6% to 595 billion yen in the 12 months ending March 2015 from 574.1 billion yen a year ago. The forecast, however missed the median analysts estimate of 693 billion yen, as the benefits from the weaker yen have already started fading away. Honda also projected that its sales will increase from 3.56 to 3.87 million vehicles in the current financial year.

One of the analysts working at Credit Suisse Group AG – Masahiro Akita said in a Bloomberg telephone interview: ““Since the beginning of the year, we began to worry about their sales in the U.S. market. The competition is getting tougher and their incentive level is rising.”

Honda Motor Co. Ltd was 1.02% up to close at 3 470 Japanese yens per share yesterday, marking a one-year change of -13.25%. According to the information published on the Financial Times, the 18 analysts offering 12-month price targets for Honda Motor Co. Ltd have a median target of 4,600, with a high estimate of 5,500 and a low estimate of 3,800. The median estimate represents a 33.92% increase from the last price of 3,435.