Fiscal-Year Profit Rises 8.8% at Honda, but It Predicts Decline

Japan’s Honda Motor Co. said profit rose 8.8% for its latest fiscal year on robust overseas car sales and a one-time trading gain but said Tuesday it expected the yen’s strength would contribute to a decline in profit this year.

Separately, Honda said its chairman, Yoshihide Munekuni, planned to resign and become the company’s advisor at the end of June. Munekuni, who has held the post for seven years, won’t be immediately replaced, Honda said.

For the fiscal year ended March 31, Honda’s net income totaled $4.28 billion, up 8.8% from a year earlier.

It was the third consecutive year the automaker reported record profit.

Still, the most recent profit fell short of Honda’s own forecast of $4.36 billion and analysts’ predictions of $4.33 billion to $4.42 billion.

Sales rose 2.4%, to $75.2 billion, with the boxy Element and Pilot sport utility vehicle, as well as the Acura-brand TSX and TL sedans, leading sales in North America.

Honda said the popularity of its vehicles overseas helped offset lackluster domestic sales and the negative effect of a strong yen. The automaker also booked a special profit from derivatives trading.

The yen’s rise against the U.S. dollar hurts exporters by lowering the value of repatriated earnings.

For the year through March 2005, Honda forecast a 16% decline in net income to $3.59 billion, despite an expected 4.1% rise in sales to $78.3 billion.

Honda shares fell 45 cents to $20.95 on the New York Stock Exchange.