Honda Motor Co. issued an annual operating profit outlook that fell short of analysts’ projections, reflecting the impact of higher raw material costs and production disruptions caused by war, China’s COVID-19 lockdowns and a persistent global shortage of semiconductors for automobiles.
Operating profit for the fiscal year through March 2023 will be ¥810 billion ($6.3 billion), the carmaker said in a statement Friday, compared with analysts’ average estimate for ¥943 billion. The outlook comes after Honda topped its own projections for the just-ended fiscal year with profit of ¥871 billion. Its guidance for last year was ¥800 billion, while analysts were estimating ¥820 billion on average.
While the weaker yen has long been considered a boon for Japan’s blue-chip exporters, it’s now starting to damage Japanese automakers as material costs inflate for importers. Oil prices have soared amid Russia’s invasion of Ukraine, while lockdowns in China are also weighing firms down, with factories being forced to halt, causing further supply chain disruptions.
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