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Honda profits sink after tsunami

Honda has said its quarterly earnings tumbled 56% compared with the same period last year, battered by the strong yen and production disruptions from the March tsunami disaster.

The Japanese maker of the Accord sedan and Odyssey minivan said net profit for the July-September period fell to 60.4 billion yen (£493.7 million). Sales sank 16.3%.

Honda said it was scrapping its previous full-year forecast because the full impact of flooding in Thailand, where the company has suppliers and assembly lines, was unclear.

The company said it would release a forecast as soon as possible.

The Thai floods are the latest blow to Japanese manufacturers as they struggle to recover from the tsunami while also being pummelled by the yen's record surge. Japanese car makers in particular use Thailand as a production base in south-east Asia.

Earlier, Japanese authorities intervened in the currency market to weaken the yen against the dollar and ease pressure on Japanese exporters. That caused the dollar to jump nearly 5% to above 79 yen after earlier touching a post-Second World War low of 75.32 yen - a level that is excruciating for exporters such as Toyota and Nintendo.

The strong yen, which erodes foreign earned income, took a bite out of Honda's profits. The company estimated that if sales were calculated at the same exchange rate as last year, quarterly sales would have fallen a less severe 12.3%.

Revenue from nearly all regions declined. Domestic sales were down 13.2%, revenue from Europe sank 10.4%, and in Asia outside Japan sales fell 10%. Sales to South America, Africa and the Mideast inched up 0.8% from a year earlier, the company said.

Honda's motorcycle business was one of its few bright spots in the quarter, with sales rising 14.2% to 357.3 billion yen (£2.9 billion).

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