Takata Expects Return to Profit by 2016 Despite Air Bag Issues

May 09, 2015 07:07 AM EDT | Matt Mercuro

Despite all of their ongoing issues, Takata feels that it will somehow return to profit this year thanks to high Asian and U.S. sales.

The controversial company has been in and out of the news since 2008 over defective company air bag inflators that tend to erupt with too much force.

So far, six deaths have been attributed to the air bag inflators in Honda vehicles, and 25 million cars have been recalled in the last seven years.

A number of executives, including Takata CFO Yoichiro Nomura, apologized to those who have been affected by the recalls during the briefing, according to Reuters.

"We are aware that there are risks, but we are not able to reasonably calculate the potential cost so we cannot include them in our balance sheet or our forecast," Nomura said in a press statement during an earnings briefing this week.

This week Takata predicted a net profit of 20 billion yen ($167 million USD) for the fiscal year through March 2016, due to a 9 percent increase in global company sales to 700 billion yen, according to Reuters.

The prediction includes a 7 billion yen expense to cover all consulting and legal fees but doesn't include recall costs.

Covering recall costs, last year hurt Takata big time, as the company booked a "special loss" during the previous fiscal year of 58.7 billion yen.

Takata is still dealing with a U.S. criminal investigation, regulatory probe and a number of lawsuits in the U.S. and Canada, according to Reuters.

Back on Feb. 20, NHTSA started charging Takata $14,000 per day for not cooperating in their investigation into faulty air bag inflators. The parts supplier said it has set aside funds in order to pay the fine in the fiscal year that just ended, but it hasn't made any payments yet.

Takata is still trying to figure out the root of the air bag issues. While the company has finished conducting tests on the air bags it couldn't give a timeframe for when its external investigation would wrap up.

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