Asimo the robot will be conducting the Detroit Symphony in a couple of weeks. Let's hope his corporate parents brief him on the company's financial results before the event, as Asimo is likely to drop the baton if he learns the news while conducting.
Asimo is the (brain) child of Honda Motor
Honda resorted to coaxing reluctant North American consumers to buy its cars with deep-cutting incentive offers that ate into the bottom line like an acid bath. Meanwhile, the cost increases affecting global manufacturers came home to roost, and the strength of the Japanese yen relative to the U.S. dollar and other currencies dealt one final blow. The company estimates that operating income would have risen by 4.4% had exchange rates remained stable, but instead it was down by 1%.
Investors who follow the auto industry are all too familiar with the saga of weakness plaguing American auto legends Ford
Results for Honda's full fiscal year 2008 were slightly better, with a 1.3% rise in net income on revenue higher by 8.3%. Auto sales rose 7.5% for the year, while sales of motorcycles weakened by 10.1%.
One particular street sign reminds me of Honda's earnings forecasts for the current fiscal year: Caution: Bridge Out. The company expects operating income to dive by 31.8% for an 18.3% reduction in net income. Management was careful to predict that the first half will be more difficult than the second, suggesting it subscribes to the notion of a broader economic recovery thereafter. Fools need to decide for themselves what their own outlook is for the economy when considering an investment in Honda, as the company's fortunes are directly tied to the fiscal health of the global consumer.
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