New plants will help meet high demand

Article Excerpt

HONDA MOTOR COMPANY ADRs $33 (New York symbol HMC; Conservative Growth Portfolio, Manufacturing & Industry sector; WSSF Rating: Above average) plans to spend $1.2 billion as part of its strategy to expand annual vehicle sales by a third by 2010. Most of the money will go to two new assembly plants, one in Japan and one in the United States. Honda also plans to build a new engine plant in Canada. The North American plants will help Honda meet its goal of producing at least 80% of its North American sales at domestic facilities. That cuts its currency risk. To put this investment in perspective, Honda earned $1.02 per ADR (total $1.9 billion) in its fourth fiscal quarter ended March 31, 2006, up sharply from $0.47 per ADR ($876 million) a year earlier. However, the latest quarterly earnings included a $1.2 billion pre-tax gain from the transfer of most of its employee pension fund liabilities and certain plan assets to the Japanese…

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