Honda profit hit by falling sales

Honda's profits for the July to September period more than halved
after car sales continued to fall during the global economic
downturn. Net profit came in at 54 bn yen ($587 m; £359 m) for the
quarter, down 56 % on the 123.3 bn yen recorded a year earlier.
Japan's second-largest carmaker said the strong yen had contributed
to a fall in sales in overseas markets. But the fall in profits was
less than had been expected, and the carmaker tripled its full-year
profit forecast. Honda says it will now make a net profit of 155 bn
yen for the year to the end of March, up from its previous forecast
of 55 bn yen. It also raised its full-year sales forecast, to 3.4
million cars from 3.29 million cars. Despite the increase in
projected future sales, revenue in the third quarter fell by 27 %
from a year ago. This was largely due to falling car sales in
overseas markets. Sales in Japan have been less affected, largely due
to government tax breaks and incentives on hybrids such as the new
Honda Insight. "Honda's numbers came in a bit better than forecast
and the biggest factor seems to be the year-on-year reduction in
production costs," said Andrew Phillips at KBC Securities.