Reply #16: Honda net jumps as sales advance [View All]

[Ghost Dog]

TOKYO (Reuters) - Honda Motor Co (7267.T) posted a much stronger-than-expected 38 percent rise in quarterly profit on Wednesday, helped by sharp growth in overseas car sales, and lifted its annual earnings forecasts as it reined in spending.

Japan's second-biggest automaker and the world's top motorcycle maker raised its profit forecasts by 5-8 percent, above consensus market projections despite lowering its revenue outlook.

Citing the yen's fall against currencies other than the U.S. dollar, bigger cost cuts and smaller R&D outlays than first thought, it now expects operating profit to climb to 920 billion yen ($8.6 billion) for the year ending March 31, up from an earlier estimate of 880 billion.

That beats a consensus estimate of 900 billion yen from 18 brokerages and is 8 percent higher than its year-earlier result.

Honda lowered its revenue projections by 1.2 percent to 12.15 trillion yen as it cut its global sales volume target by35,000 cars.

Executive Vice President Koichi Kondo said the U.S. subprime loan fallout had not hurt Honda's car sales so far but it was hitting demand for motorcycles and power products badly.

"So far on the car business, it's neither negative nor positive," he told a news conference. "We're carefully monitoring the situation," he added, noting that Honda's U.S. sales in January likely held last year's level.

Honda lowered its forecast for global motorcycle shipments by 4 percent to 9.23 million bikes, and for power products by 5 percent.

Analysts are upbeat on Honda's growth prospects as it adds production capacity around the world -- from the emerging regions of China and Brazil to the mature U.S. and Japanese markets -- backed by healthy demand for its fuel-efficient cars.

Keeping up with demand has been one of Honda's main challenges due to its wariness over big capital outlays, but analysts said its recent expansion plans positioned it for a lift in 2008 and beyond.

Honda has a goal of selling at least 4.5 million cars in 2010, versus 3.76 million last year.

Kondo said there was risk of a profit slowdown in the next business year but stressed much would depend on currency swings.

"For this business year, the yen fell against many currencies such as the euro and the Brazilian real, and that helped offset the appreciation against the dollar," he said. "For next year, we'll have to see what the net impact is."

/... http://news.yahoo.com/s/nm/20080130/bs_nm/honda_results_dc;_ylt=AmvQbs.LeFcQk_F_KGOxFfy573QA