Honda ups f'cast after best quarter in 1-½ yrs

2010-02-02 23:05
Honda Motor Co (7267.T), Japan's No. 2 carmaker, lifted its annual outlook for the third time after a recovery in global auto sales and a weaker-than-expected yen helped it to its strongest quarterly operating profit in a year and a half.

Honda has weathered the industry's turmoil better than many automakers as its profitable and dominant motorcycle business cushioned the blow wrought by the financial crisis.

Honda's car business, heavy in fuel-efficient models such as the Civic and Jazz, has also turned up recently thanks to government sales incentives such as the United States' cash-for-clunkers programme.

It may see a further benefit from the global recall of millions of vehicles by larger rival Toyota Motor Corp (7203.T), particularly in the key U.S. market. [ID:nN27231388]

However, U.S. auto sales data for January released on Tuesday showed Honda's seasonally adjusted sales growing just 2.9 percent in an overall market that grew 15 percent. [ID:nN0259282]

Honda said on Wednesday its operating profit for the October-December quarter jumped 73 percent to 177 billion yen ($1.96 billion), marking its biggest profit in six quarters.

That beat a mean estimate of about 85 billion yen in a poll of three analysts by Thomson Reuters I/B/E/S.

For the full year to the end of March, the maker of the Civic and other fuel-efficient cars expects an operating profit of 320 billion yen versus a previous estimate of 190 billion yen and well above a mean estimate of 237.4 billion yen in a poll of 20 analysts by Thomson Reuters I/B/E/S.

The company, headed by CEO Takanobu Ito, also raised its full-year forecasts at both its first and second quarter earnings releases.

Honda is the first to report the latest quarterly results among Japan's top three automakers.

Toyota, which is grappling with a massive global recall over faulty accelerator pedals, is scheduled to announce its results on Thursday.

Honda had to initiate a recall of its own last week, saying some 646,000 of its Fit/Jazz and City models would be recalled globally due to a faulty window switch after a child died when fire broke out in a car last year. [ID:nLDE60S0MD]

Honda kept its forecast for global car sales unchanged at 3.4 million units for this financial year.

Shares of Honda gained 8 percent since late October, when it nearly tripled its full-year operating profit forecast, outperforming a 1.4 percent increase in the benchmark Nikkei average. .N225

Source: Reuters

Click here to visit our forums to discuss this story