Honda Motor Co., Ltd. Reports Consolidated Financial Results for the Fiscal Second Quarter Ended September 30, 2009

TOKYO, Oct. 27  /PRNewswire-FirstCall/ -- Honda Motor Co., Ltd. (NYSE:HMC) today announced its consolidated financial results for the fiscal second quarter and the fiscal half ended September 30, 2009.

Second Quarter Results

Honda's consolidated net income attributable to Honda Motor Co., Ltd. for the fiscal second quarter ended September 30, 2009 totaled JPY 54.0 billion (USD 599 million), a decrease of 56.2% from the same period in 2008.  Basic net income attributable to Honda Motor Co., Ltd. per common share for the quarter amounted to JPY 29.78 (USD 0.33), a decrease of JPY 38.18 from JPY 67.96 for the corresponding period last year.  One Honda American Depository Share represents one common share.

Consolidated net sales and other operating revenue (herein referred to as "revenue") for the quarter amounted to JPY 2,056.6 billion (USD 22,799 million), a decrease of 27.2% from the same period in 2008, primarily due to decreased sales in the automobile business and unfavorable currency translation effects.  Honda estimates that had the exchange rates unchanged from the corresponding period in 2008, revenue for the quarter would have decreased by approximately 16.1%.

Consolidated operating income for the quarter totaled JPY 65.5 billion (USD 727 million), a decrease of 56.0%, due primarily to decreased profit attributable to decreased sales, the impact of unfavorable currency effects caused by the appreciation of the Japanese yen and the increase in fixed costs per unit as a result of reduced production despite decreased SG&A expenses and R&D expenses and continuing cost reduction efforts.

Consolidated income before income taxes and equity in income of affiliates for the quarter totaled JPY 66.1 billion (USD 733 million), a decrease of 55.7% from the same period in 2008.

Equity in income of affiliates amounted to JPY 22.3 billion (USD 248 million) for the quarter, a decrease of 18.1% from the corresponding period last year.

  Financial Highlights


                                             Yen (millions)
                                             --------------
                                       Three months  Three months
                                          ended          ended
                                         Sep. 30,        Sep. 30,
                                           2008           2009


  Net sales and
   other operating revenue              2,826,865      2,056,655
  Operating income                        148,851         65,543
  Income before income taxes
   and equity in income of
   affiliates                             149,462         66,140
  Net income attributable to
   Honda Motor Co., Ltd.                  123,316         54,037
                                                    Yen
                                                    ---
  Basic net income
   attributable to
   Honda Motor
   Co., Ltd. per
   common share                             67.96          29.78

  Business Segment



With respect to Honda's sales for the fiscal second quarter by business segment, motorcycle unit sales totaled 2,407 thousand units, a decrease of 16.8% from the same period last year.  Unit sales in Japan totaled 52 thousand units, a decrease of 34.2% compared to the same period last year.  Outside of Japan, total unit sales totaled 2,355 thousand units, a decrease of 16.3% from the same period in 2008*, due mainly to decreased unit sales in Indonesia and Other Regions including Brazil in South America, more than offsetting increased unit sales in India.  Revenue from sales to external customers decreased 31.4%, to JPY 275.3 billion (USD 3,052 million) from the same period last year, due mainly to decreased unit sales and unfavorable currency translation effects.  Operating income decreased 79.9% to JPY 9.3 billion (USD 103 million) from the same period last year, due primarily to decreased profit attributable to decreased sales and the impact of unfavorable currency effects, more than offsetting decreased SG&A expenses and R&D expenses.

*Of the net sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, those with respect to which parts for manufacturing were not supplied from Honda or its subsidiaries are not included in net sales and other operating revenue, in conformity with U.S. generally accepted accounting principles.  Accordingly, these unit sales are not included in the financial results.  Sales of such products amounted to approximately 1,350 thousand units for the period.

Honda's automobile unit sales totaled 838 thousand units, a decrease of 10.4% from the same period last year.  In Japan, unit sales amounted to 158 thousand units, an increase of 3.9% compared to the same period last year due mainly to favorable sales of Insight, Zest and Fit together with tax breaks and incentives on fuel-efficient green cars.  Unit sales outside of Japan decreased 13.2% to 680 thousand units from the corresponding period last year, due mainly to decreased unit sales in North America, more than offsetting increased unit sales in Asia, especially in China and India.  Revenue from sales to external customers decreased 28.1% to JPY 1,560.5 billion (USD 17,299 million) from the same period in 2008, due mainly to decreased unit sales and the unfavorable currency translation effects.  Operating income decreased 82.7% to JPY 13.7 billion (USD 152 million) from the same period last year, due primarily to decreased profit attributable to decreased unit sales, the impact of unfavorable currency effects and the increase in fixed costs, more than offsetting decreased SG&A expenses and R&D expenses and continuing cost reduction efforts.

Revenue from sales to external customers in the financial services business decreased 2.2% to JPY 155.0 billion (USD 1,719 million) from the same period in 2008, due mainly to the unfavorable currency translation effects, more than offsetting an increase in operating lease revenues.  Operating income increased 94.0% to JPY 47.1 billion (USD 523 million) from the same period in 2008, due primarily to the decreased allowance for losses on lease residual values, a gain from lease assets and a decrease in funding costs.

Honda's power product unit sales totaled 932 thousand units, a decrease of 22.5% from the same period in 2008.  In Japan, unit sales totaled 75 thousand units, a decrease of 48.6% from the same period last year.  Unit sales outside of Japan totaled 857 thousand units, a decrease of 18.8% from the corresponding period last year due primarily to a decline in unit sales in all the regions.  Revenue from sales to external customers in power product and other businesses decreased by 31.9% to JPY 65.7 billion (USD 729 million) from the same period last year, due mainly to decreased unit sales of power products and unfavorable currency translation effects.  Honda reported an operating loss of JPY 4.6 billion (USD 52 million), primarily due to decreased profit attributable to decreased revenue, which more than offset decreased SG&A expenses.

*United States dollar amounts have been translated from yen solely for the convenience of the reader at the rate of  90.21 yen =U.S.$1, the mean of the telegraphic transfer selling exchange rate and the telegraphic transfer buying exchange rate prevailing on the Tokyo foreign exchange market on September 30, 2009.

Forecasts for the Fiscal Year Ending March 31, 2010

In regard to the forecasts of the financial results for the fiscal year ending March 31, 2010, Honda projects consolidated results to be as shown below:

The forecasts are based on the assumption that the average exchange rates for the Japanese yen to the U.S. dollar and the Euro will be JPY 85 and JPY 125, respectively, for the second half of the fiscal year ending March 31, 2010, and JPY 90 and JPY 129, respectively, for the full year ending March 31, 2010.

Projected unit sales for the full fiscal year ending March 31, 2010 are shown below.

                                    Unit (thousands)  Changes from FY2009
                                   ----------------   -------------------
                                                           (thousands)
                                                           -----------
  Motorcycle business                         9,565                 - 549
  Automobile business                         3,400                 - 117
  Power product and Other businesses          4,455                 - 732



  FY2010 Forecasts for Consolidated Results
  Fiscal year ending March 31, 2010


                                          Yen (billions)   Changes from FY
                                                                 2009
                                          --------------   ---------------
  Net sales and other operating revenue            8,450           - 15.6%
  Operating income                                   190           +  0.2%
  Income before income taxes and equity
   in income of affiliates                           170           +  5.1%
  Net income attributable to                         155           + 13.1%
  Honda Motor Co., Ltd.
                                               Yen
                                               ---
  Basic net income attributable to
  Honda Motor Co., Ltd. per common                 85.42
   share



  Dividend per Share of Common Stock



The Board of Directors of Honda Motor Co., Ltd., at its meeting held on October 27, 2009, resolved to make the quarterly dividend JPY 8 per share of common stock, the record date of which is September 30, 2009.  The total expected annual dividend per share of common stock for the fiscal year ending March 31, 2010, is JPY 32 per share.

For additional information, please visit

http://world.honda.com/investors/meeting/ where you can download 2Q financial results and presentation materials.

This announcement contains "forward-looking statements" as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Such statements are based on management's assumptions and beliefs taking into account information currently available to it.  Therefore, please be advised that Honda's actual results could differ materially from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in Honda's principal markets and foreign exchange rates between the Japanese yen and the U.S. dollar, the Euro and other major currencies, as well as other factors detailed from time to time.  The various factors for increases and decreases in income have been classified in accordance with a method that Honda considers reasonable. 

DATASOURCE: Honda Motor Co., Ltd.



CONTACT:  Mitsuhiro Okayama, Investor Relations, American Honda Motor

Co., Inc., [phone]



Web Site:  http://www.world.honda.com/investors/meeting 

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