Honda forecasts higher profit on sales recovery

Honda Motor Co., Japan's second-largest carmaker, forecast profit will rise 27 percent this fiscal year as vehicle demand recovers amid the improving global economy.

Honda may boost net income to 340 billion yen ($3.6 billion) in the 12 months ending March 31 from 268.4 billion yen a year earlier, the Tokyo-based company said in a statement today. Sales may rise to 9.34 trillion yen from 8.58 trillion yen.

The maker of Accord sedans increased U.S. deliveries 23 percent in March from a year earlier as the nation's auto demand jumped 24 percent. Honda's sales may rise 9 percent to 650,000 vehicles this year in China, where industrywide demand will likely grow more than 10 percent, Chief Executive Officer Takanobu Ito, 56, said at the Beijing Motor Show last week.

"Honda is highly exposed to the U.S. market, so it will benefit from a demand recovery there," said Kohei Takahashi, an analyst at JPMorgan Chase & Co. in Tokyo. "It's also strong in emerging markets in Asia."

Honda fell 1.5 percent to close at 3,285 yen in Tokyo. The stock has gained about 6 percent this year, compared with a 6 percent drop for larger domestic rival Toyota Motor Corp.

Fourth-quarter profit at Honda was at 72.1 billion yen, the company said in the statement.