Honda Motor Co. said Wednesday its October-December profit jumped by a factor of six, as aggressive cost cutting and improved Asian car sales overcame a strong yen and slumping business in Europe and North America.
Honda reported after the market close that its fiscal third-quarter profit rose sharply to 134.6 billion yen ($1.46 billion), or 74.19 yen a share, from 20.2 billion yen, or 11.16 yen a share, in the same quarter a year before.
The results easily beat expectations of analysts polled by Thomson Reuters for a 73.5 billion yen profit.
However, operating revenue for the quarter slipped to 2.24 trillion yen compared to 2.53 trillion yen in the year-ago period.
Honda attributed the fall of 11.5% to "unfavorable currency translation effects and decreased sales in the automobile business," though even on a constant-currency basis, revenue would have still fallen about 6%.
Auto sales flagged 2.8% from the year-earlier quarter, despite increases in China and India, as well as a 31% increase in Japanese sales "due mainly to sales of Insight, Fit and Step WGN, together with tax breaks and subsidies for fuel-efficient vehicles."
Car sales in North America and Europe were responsible for much of the overall drop, Honda said.
But operating income still managed to increase almost 73%, "due primarily to decreased SG&A [selling, general and administrative] expenses and R&D [research and development] expenses and continuing cost-reduction efforts."
For the full fiscal year ending March 31, Japan's No. 2 auto maker expects a profit of 265 billion yen, up from a previous forecast of 155 billion yen. It also predicted sales of 8.53 trillion yen.
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