TOKYO (Reuters) – Japan’s Honda Motor Co (7267.T) reported a 16% drop in first-quarter operating profit on Friday, as a stronger yen weighed on overseas earnings and U.S. vehicle sales dropped.
Japan’s No.3 automaker posted operating income of 252.4 billion yen ($2.36 billion) for the April-June period, compared with 299.3 billion yen a year ago and an average forecast of 246.9 billion yen from seven analysts polled by Refinitiv.
The company’s U.S. sales fell to 407,000 vehicles over the three-month period, from 425,000 vehicles a year earlier.
It lowered its forecast for global sales in the year to March 2020 to 5.11 million vehicles, from its prior projection of 5.16 million and a record 5.323 million sold last year.
Honda, however, reiterated its forecast for a 6% increase in operating profit to 770 billion yen for this fiscal year.
Honda, like other car makers, has been scrambling to reinvent itself amid rising competition from technology firms – such as Google parent Alphabet (GOOGL.O) and Uber (UBER.N) – as the auto industry moves toward vehicles that are shared, autonomous and electric.
In May, Honda signaled that it was looking to cut global production costs by 10% by 2025 and scale back regional model variations, channeling savings into research and development.
The company has also expanded partnerships, joining mobility project by SoftBank Group Corp (9984.T) and Toyota Motor Corp (7203.T), and investing in General Motors Co’s (GM.N) Cruise self-driving vehicle unit.
Reporting by Kevin Buckland; Editing by Himani Sarkar