Jun 14, 2011
Honda Motor Co. (NYSE:HMC) forecast a 65% drop in annual profit for its year ended March 2012 this morning, as vehicle production continues to be hampered due to the March 11th earthquake.
The company said it expects total production for the year to drop 6% to 3.3 million total vehicles for the year, down from 3.51 million in its year ended in March 2011.
Honda is projecting a profit of $2.4 billion, down sharply from the $6.6 billion recorded last year, and far lower than the post-quake consensus estimate for $5.0 billion. Revenues are projected to fall 7.1% to $104 billion.
The estimates are based on an average exchange rate of 80 yen to the dollar and 110 yen to the euro.
The company said it expects Japanese production to nearly normalize by later this month, while overseas production could take until August or September. That isn't very encouraging, considering the company manufactures over 70% of its cars outside of Japan.
Honda Motor has a potential upside of 27.9% based on a current price of $36.13 and an average consensus analyst price target of $46.2.
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