Honda's quarterly profit falls on strong yen

TOKYO: Honda reported a nearly 40 percent drop in quarterly profit, hit by a strong yen and fading sales in Japan but raised its full-year earnings forecast, crediting cost cuts.

Honda's October-December profit totaled 81.1 billion yen ($989 million), down from 134.6 billion yen the year before, it said Monday. Quarterly sales slipped nearly 6 percent to 2.11 trillion yen ($25.7 billion).

A strong yen hurt Tokyo-based Honda's overseas earnings and the end of green car incentives crimped vehicle sales in Japan, offsetting the perk from strong motorcycle sales in Asia.

Honda Motor Co. was upbeat about the full fiscal year through March 2011, raising its profit forecast to 530 billion yen ($6.5 billion) from its October forecast of 500 billion yen ($6.1 billion).

The revision was mostly from cost cuts and improved model offerings.

The maker of the Civic sedan, Odyssey minivan and Asimo robot lowered its full-year sales projection to 8.9 trillion yen ($108.5 billion) from 9 trillion yen ($109 billion), mainly because the yen is expected to remain strong.

But the lowered projection still leaves Honda ahead of the previous fiscal year when it posted 268 billion yen ($3.3 billion) profit on 8.58 trillion yen ($105 billion) sales.