Honda Motor Co. (HMC) revealed that it would recall 50,190 units of the Civic compact car in the U.S. in order to fix a flaw related to their drive shafts that may not have been properly assembled. The problem could lead to a loss of engine power and cause the vehicle to roll away if the parking brake is not applied.
Honda stated that it will inspect and replace the driver’s side driveshaft if required. The automaker has not yet received any reports of crashes or injuries due to the problem. It will start recalling the vehicles from the 2012 model year.
Civic compact is a popular model in the U.S. Last month, its sales jumped 82.6%. The compact car faces strong competition from similar lineups offered by Ford Motor Co. (F), General Motors‘ (GM) Chevrolet and Hyundai Motor (HYMLF).
Last month, Honda had also recalled 56,881 units of Acura TL sedans in North America due to a problem with their power steering hose. As many as 52,615 units of the sedan were recalled in the U.S. and 4,266 units in Canada. The vehicles belonged to the 2007-2008 model year.
From the beginning of 2011 to date, Honda’s largest recall included 1.5 million cars in the U.S. due to a problem with their transmission system. The recall included CR-V (model year 2007-2010), Element (2005-08) and Accord with 4-cylinder engines (2004-10).
The Zacks #1 Rank (Strong Buy) company revealed a steep 61% increase in profits to ?71.6 billion ($871 million) in the fourth quarter of the fiscal 2012 ended March 31, 2012 from ?44.6 billion in the same quarter of prior fiscal year. On per share basis, profits were ?39.72 (48 cents) in the quarter versus ?24.72 in the prior year, missing the Zacks Consensus Estimate of 62 cents.
Consolidated net sales and other operating revenues grew 9% to ?2.4 trillion ($29.3 billion), despite unfavorable foreign currency translation effects. The improvement was attributable to higher revenues from motorcycle and automobile businesses.
Consolidated operating profit more than doubled to ?112.0 billion ($1.4 billion) from ?46.2 billion in the fourth quarter of fiscal 2011, driven by increase in sales volume and model mix and lower selling, general and administrative (SG&A) expenses, despite higher research and development (R&D) expenses and unfavorable foreign currency effect.
For fiscal 2013, Honda has projected revenues to increase 30% to ?10.3 trillion. Operating profit is expected to jump 168% to ?620 billion and profits are anticipated to surge 122% to ?470 billion or ?260.78 per share. The company expects higher revenues, favorable model mix and effective cost reduction measures to contribute to the increase in profits during the year.
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