Honda has raised its forecast for operating profit this financial year after posting a strong rise in quarterly earnings boosted by a favourable exchange rate and rising demand in Asian markets.
Honda's consolidated profit for the fiscal first quarter ended June 30 totalled JPY 207.3 billion (USD 1,851 million), an increase of 18.7% from the same period last year
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Consolidated sales revenue for the quarter amounted to JPY 3,713.0 billion (USD 33,153 million), an increase of 7.0% from the same period last year, due primarily to increased revenue in financial services business and motorcycle business operations as well as favourable currency effects.
Consolidated operating profit for the quarter amounted to JPY 269.2 billion (USD 2,404 million), an increase of 0.9% from the same period last year, due primarily to an increase in sale volume and model mix and continuing cost reduction efforts.
For the year to March 31, 2018, Honda now expects an operating profit of 725 billion yen ($6.57 billion), versus 705 billion yen forecast earlier. The operating profit total would still be 13.8% down on the last fiscal year though.
Analysts note that Honda is being hit by lower profits from North America. Not only is the US market slowing, but Honda's product range is seen as too strongly associated with traditional passenger cars – such as the Accord – rather than hot-selling SUVs.
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By GlobalDataHowever, sales in Asia, including China, were up by 10% in the quarter and China is expected to become Honda's largest market this year.
