Honda quarterly profit rose 8.8 percent, earnings forecast raised

By From Associated Press| Feb 01 2007
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TOKYO -- Profit at Honda climbed 8.8 percent for the most recent quarter on strong sales in North America, Europe and Asia, prompting Japan's No. 2 automaker on Wednesday to raise its full-year profit forecast slightly.

Honda Motor Co., which makes Accord and Civic cars, reported group net profit of $1.2 billion for October-December, up from 133.1 billion yen the same period a year earlier. It was the first time in three years that earnings in the fiscal third quarter rose year-on-year.

Quarterly sales jumped 12 percent to $22.8 billion, marking the seventh straight year of record sales for the fiscal third quarter.

Honda said auto sales were healthy around the world, but especially in North America, where the Accord compact car and CR-V sport-utility vehicle sold briskly, as well as in China, where the auto market is growing.

Honda surpassed Nissan Motor Co. to regain the No. 2 spot among Japanese auto makers last year as measured by global vehicle production. The last time Honda was No. 2 in Japan was 2003.

For the year through March, Honda boosted its profit forecast to $4.6 billion up from its earlier forecast of $4.56 billion. However, that's down from the previous fiscal year's net profit of 597 billion yen.

Honda kept its sales forecast for the full year unchanged at $91 billion, up 12 percent from the previous year.

Honda sold 915,000 vehicles during the latest quarter, up 12.1 percent from the same period a year earlier. Although vehicle sales were flat in Japan, they surged 22 percent in Europe, 32.5 percent in Asia and 8.5 percent in North America, the company said.

A weak yen also boosted Honda's earnings, adding $87 million during the quarter. For the first nine months of the fiscal year, Honda earned a $3.4 billion profit, up 10.2 percent from 2005, on $65.8 billion sales, up 13.1 percent.

Honda sold 2.69 million automobiles during the nine months, up 8.2 percent from 2005. It expects to sell 3.39 million vehicles for the year ending March 31, up 8.1 percent from the previous fiscal year.

Honda shares, which have gained nearly two-thirds in value over the past year, closed down 1.3 percent at $39.

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