Honda Motor said on Friday its net profit more than doubled to US$1.7bn for the three months to September, while it also upgraded its full-year profit forecast, and Mazda Motor also posted a healthy rise in earnings.
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Honda said its net profit came to 135.9bn yen (1.7bn dollars) for the fiscal second quarter, up from JPY54.0bn a year earlier.
The company said the brisk performance was mainly due to Japanese government incentives for energy efficient cars and its own cost-cutting efforts, which offset the negative impact of a strong yen, Reuters reported.
The yen has been trading at 15-year-highs, hammering Japanese exporters by making their products less competitive abroad while also reducing their repatriated earnings when they are converted back into yen.
Despite such currency woes, Honda’s sales rose 9.5% to 2.25 trillion yen and its operating profit soared to JPY163.4bn from JPY65.5bn for the quarter.
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By GlobalDataHonda raised its net profit forecast for the financial year to March 2011 to JPY500bn from the JPY455bn projected earlier.
The firm is now forecasting full-year operating profit of JPY500bn, up from JPY450bn foreseen earlier. However it downgraded its annual sales forecast to JPY9.0 trillion from an earlier estimate of JPY9.1 trillion.
Honda’s global vehicle sales were up 7.2% from a year earlier thanks to increased demand in India and China, as well as moderate recoveries in Japan and North America.
“Japanese carmakers, including Honda, have shown strong recovery for the first half thanks to strong sales of its environmentally friendly vehicles,” Shigeru Matsumura, an auto analyst at SMBC Friend Securities, told Reuters.
“But demand for vehicles has been slowing down due to an end to part of the government incentives,” Matsumura said. “Another concern is a strong yen and a rise in prices of raw materials.”
Separately, Mazda Motor said it posted a net profit of JPY7.6bn yen in the quarter, up from JPY700m a year earlier, thanks to brisk sales in Japan, China and North America, along with cost reductions.
Mazda raised its full-year net profit outlook to JPY6bn from JPY5bn.
