TOKYO ? Battered by the strong yen and supply disruptions from Thailand's floods, Honda said Tuesday that its net earnings in the October-December quarter tumbled 41 percent to 47.6 billion yen ($625 million) and projected a sharply lower full-year profit.
The Japanese automobile and motorcycle maker forecast it would earn 215 billion yen for the fiscal year through March, down nearly 60 percent from the 534 billion yen it earned the previous fiscal year.
Honda had scrapped its earnings forecast in October, when it reported its previous quarterly results, because the flooding in Thailand ? a key Asian production hub for Honda and many Japanese companies ? made the outlook too uncertain.
Honda stopped making cars at its automobile assembly plant in Ayutthaya, north of Bangkok, in October after it was damaged in the worst floods to hit Thailand in 50 years. The company said in a statement that it was making progress on draining the plant of flood water and cleaning up equipment, and that production was expected to resume by the end of March.
The flooding also disrupted the output at many Honda suppliers in Thailand, forcing it to reduce production as far away as the U.S. and Canada. Honda said production in neighboring Asian countries interrupted by the problems in Thailand was expected to return to normal by April.
All told, the problems related to flooding in Thailand have cost the company 260,000 vehicles in lost production worldwide, according to Tomohiro Okada, a company spokesman.
Quarterly sales slid 8 percent during the fiscal third quarter to 1.942 trillion yen.
The strong yen, which erodes Japanese exporters' foreign earned income when repatriated, also ate into the company's income. Declines due to unfavorable exchange rates accounted for 33.6 billion yen, or nearly half, of the 73.1 billion yen drop in net income before taxes reported the same quarter a year ago, Okada said.
A bright spot for the company was its motorcycle business, amid strong demand in emerging markets. Motorcycle sales rose 6.3 percent during the quarter to nearly 3.1 million units.
(This version CORRECTS Corrects impact from currencies in paragraph 8, adds lost production of vehicles from Thai flooding in paragraph 6, adds details about growth in motorcycle business)
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