Honda Motor Co.’s operating profit surged 38% in the latest quarter as rising sales, a pension plan adjustment and cost cutting offset foreign exchange losses, prompting the automaker to lift its earnings outlooks for the current fiscal year.
Operating profit increased to 228.08 billion yen (USD2.25 billion) in the Japanese carmaker’s fiscal second quarter ended Sept. 30, from 164.84 billion yen (USD1.63 billion) a year earlier.
Net income climbed 39% to 177.10 billion yen ($1.75 billion) in the three months, Executive Vice President Seiji Kuraishi said while announcing financial results Oct. 30.
But the biggest profit drivers remained Asia and the home market of Japan. Looking ahead, Honda boosted its profit outlooks for the current fiscal year ending March 31, 2017, even as the company scaled back its revenue forecast. The pension windfall, cost reductions and higher unit sales will help.
Revenue is now forecast to decline 8.2% to 13.40 trillion yen (USD132.29 billion). It had earlier forecast revenue to decline only to 13.75 trillion yen (USD135.75 billion).
But operating profit is now seen advancing 29% to 650.0 billion yen (USD6.42 billion), compared to an earlier outlook for a 19% increase to 600 billion yen (USD5.92 billion)
At the same time, Honda sees net income gaining 21% to 415.0 billion yen (USD4.19 billion). It had earlier seen net income rising 13% to 390 billion yen (USD3.85 billion).
Honda also improved its global sales forecast. It now expects its global sales to increase 1.3% to 4.98 million vehicles, up from an earlier prediction of 4.92 million.
