Honda has announced a decline in net income for its financial year ended March 31, 2007, despite a strong increase in sales.

Consolidated net income totaled JPY 592.3bn (US$5,018m), down 0.8% from a year earlier. Consolidated revenue for the period totaled JPY 11,087.1bn ($93,919m), up 11.9% from the 2006 financial year.

Honda estimates that if exchange rates had remained unchanged from the previous year, revenue for the period would have increased by around 7.4%.

Consolidated operating income for the period totaled JPY 851.8 billion ($7,216m), a decrease of 2.0% compared to the previous fiscal year. Honda said this decrease in operating income was primarily due to the negative impact of the change in model mix, and soaring raw material costs, as well as increased R&D expenses.

Unit vehicles sales were 3,652,000 units, up 7.7% from the previous financial year. Domestic sales fell 3.4% to 672,000 units, while overseas sales were up 10.6% to 2,980,000.

Operating income in the automotive division decreased 4.6% to JPY 599.5bn (US$5,978m) from the previous year.

For 2008 Honda is forecast net sales and other operating revenue to increase six percent, with operating income declining by 9.6%, primarily because of the impact of the strong yen.