Honda Motor Company said today that its net profit dived 89% in its fiscal third quarter as demand for cars slumped and it slashed its annual earnings forecast by more than half.
Japan's second-largest car maker logged a net profit of 20.24 billion yen ($226m) for the three months to December, down from 200.01 billion yen the same time a year earlier.
Operating profit tumbled 62.3% to 102.45 billion yen, as revenue slumped 16.8% to 2.53 trillion yen, due to weak car sales and the impact of a stronger yen, which eroded export earnings.
Honda reported a 5.1% drop in car sales in the quarter to 940,000 units.
The group cut its net profit forecast to 80 billion yen for the year to March 2009, down from an earlier forecast of 185 billion yen. That would mark a decline of 86.7% from the previous year.
Operating profit is expected to drop 85% to 140 billion yen as revenue declines 15.9% to 10.1 trillion yen.
Japanese car makers have been slashing output and laying off workers to cope with the global economic crisis, which has sent demand for cars plunging as consumers tighten their belts in recession-hit major economies.
