Honda Joins Mazda in Share Drop After Forecast Miss: Tokyo Mover

Honda Motor Co. (7267) and Mazda Motor Corp. (7261) fell in Tokyo trading as the Japanese carmakers forecast profits that missed analyst estimates. Suzuki Motor Corp. (7269) rose after earnings at its Indian unit almost doubled.

Honda fell as much as 3.7 percent to 3,860 yen on the Tokyo Stock Exchange, the stock’s biggest intraday decline in two months, as of 9:57 a.m. Mazda, Japan’s most export-dependent carmaker, fell as much as 5.2 percent to 328 yen. Suzuki rose as much as 7.8 percent to 2,533 yen. The benchmark Nikkei 225 Stock Average declined 0.7 percent.

Honda’s net income will probably rise 58 percent to 580 billion yen ($5.9 billion) in the 12 months ending March 2014, the Tokyo-based automaker said April 26. Though the profit forecast missed the average analyst estimate compiled by Bloomberg, Honda’s revenue projection exceeded estimates.

“Margin improvement is sluggish, but not because of any changes in the competitive landscape or because of structural problems,” Takaki Nakanishi, a Tokyo-based analyst with Bank of America Merrill Lynch, wrote in a report about Honda. This is “solely due to a heavier burden from upfront investment than expected.”

Mazda fell after the company said net income may rise to 70 billion yen in the year ending March 2014, below the 82 billion yen average of 19 analyst estimates compiled by Bloomberg. Suzuki rose after its Indian unit said profit almost doubled because of a weak Japanese yen and more orders for its Ertiga minivans.

Honda, the first major Japanese automaker to report results this earnings season, is targeting to sell a record number of vehicles this year. A weaker yen and demand in the U.S., its biggest market, is helping the company buffer a drop in China sales, where a territorial dispute has fueled anti-Japan sentiment.

To contact the reporter on this story: Ma Jie in Tokyo at jma124@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

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