Japanese automobile manufacturer, Honda reported 27 percent surge in operating profit at Honda Motor Co. in the latest quarter, driven by robust sales in North America and China, along with lower recall costs.
The sales increase and falling costs more than offset huge foreign exchange losses that hammered Honda, and other Japanese automakers, in the three months ended Dec. 31.
Honda also raised its profit and sales forecasts for the current fiscal year, citing a return to more favorable currency rates and higher-than-expected sales in Asia.
In the Japanese carmaker’s fiscal third quarter, operating profit climbed to 207.6 billion yen ($1.78 billion), from 163.0 billion yen ($1.40 billion) a year earlier.
Net income advanced 36 percent to 168.8 billion yen ($1.45 billion), Executive Vice President Seiji Kuraishi said while announcing financial results Friday.
Revenue fell 3.2 percent to 3.50 trillion yen ($29.99 billion) in the three months, hurt mostly by a negative foreign currency effect of translating dollars into Japanese yen. Global retail sales rose 6.8 percent to 1.3 million vehicles in the fiscal third quarter.
Honda’s operating profit was buoyed by stepped-up cost cutting efforts that added 51.9 billion yen ($444.7 million) to the bottom line in the fiscal third quarter.
Lower outlays for recalled Takata airbags also helped. Lower warranty spending and other quality related expenses chipped in another 86.6 billion yen ($741.9 million), Automotive News reports.
