Japanese car giant Honda revised its annual profit forecast downwards on Friday, warning it sees no immediate end to the chip shortage and supply-chain issues impacting automakers worldwide.
The announcement came as the firm logged a drop in net profit in the July-September quarter, although first-half net profit was buoyed by stronger results seen in the previous three months.
“The external business environment will remain challenging during this fiscal year due primarily to the resurgence of COVID-19, the supply shortage of certain parts including semiconductors and an increase in raw material costs,” the firm said in a statement.
The results were announced a day after rival Toyota upgraded its annual profit forecast despite being forced to cut production by the global shortage of semiconductors, which are essential components in modern cars.
Honda lowered its 2012-22 net profit forecast to ¥555 billion ($4.8 billion) from its previous estimate of ¥670 billion.
Net profit dropped 31% year-on-year in the second quarter.
But first-half earnings were brighter, with net profit up 143% from the same six-month period last year, reaching ¥389.2 billion.
Operating profit in the first half also climbed 161% to ¥442.1 billion.
“This was due primarily to the positive effect of increased unit sales, cost reduction efforts and favorable currency effects,” Honda said, after the first six months of 2020-21 were “heavily impacted by the COVID-19 pandemic.”
However, it lowered its full-year operating forecast to ¥660 billion on sales of ¥14.6 trillion, from ¥780 billion and ¥15.45 trillion respectively.
Many automakers have been forced to slow or temporarily halt production due to the chip shortage.
Last week General Motors and Ford reported lower profits as the semiconductor crunch dented sales, and both U.S. auto giants cautioned that shortages would persist into 2022.
Volkswagen also said underlying profits tumbled in the third quarter as the chip shortage left it unable to meet demand for its vehicles.
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