Honda Motor, Japan's second-largest automaker, reported a net loss of $1.9-billion in the fourth quarter but booked profit for the year ended March 2009, while projecting profit for the current fiscal year.
In the January-March quarter, Honda posted a net loss of 186.1 billion yen ($1.9 billion), against a profit of 25.43 billion yen for the same period last year.
Honda's group net profit of 137 billion yen for the fiscal year 2008-09 was down 77.2 per cent from a year earlier, but better than its January net profit forecast of 80 billion yen.
Honda's quarterly sales dropped 42 per cent to 1.78 trillion yen from 3.06 trillion a year earlier while for the whole year, sales dropped 17 per cent to 10.01 trillion yen.
Its operating profit also tumbled 80.1 per cent to 189.64 billion yen, down 16.6 per cent from a year earlier, first drop in nine years.
The company had forecasted in December net income of 185 billion yen ($2.08 billion) for the year ending 31 March compared to its earlier forecast of 485 billion yen. (See: Honda may report first half-year loss in 11 years)
Honda had, in December cut down production to combat a dramatic slump in car sales amid the global slump. Honda has announced it will cut 3,100 jobs in Japan and reduce domestic production by 56,000 vehicles. (See: Japanese auto makers cut back on production, reduce workforce)
Honda announced in December its withdrawal from Formula One as a measure of cutting cost due to the global credit crisis.
Japan's vehicle exports to the US, China and Europe took a major hit with consumers tighten their belts due to the global economic recession.
This got compounded with the yen becoming stronger thereby reducing the value of its' foreign earnings and making it difficult to be competitive in foreign markets.
Among Japan's top three automakers, Honda is likely to be the only one to show profit for fiscal year 2008-09, as Toyota Motor and Nissan Motor are expected to report huge losses when they declare their results in May.
For the current fiscal year to March 2010, Honda has projected a net earning of 40 billion yen and operating profit of 10 billion yen. It has projected sales of 3.21 million automobiles and 8.60 million motorcycles.
The company's projections are conservative and the company is confident of meeting its target. However, much depends on foreign exchange concerns and the recovery of emerging economies such as China, said Honda executive vice president Koichi Kondo.