Honda profit plunges, but car giant raises full-year forecast

TOKYO -- Honda's quarterly profit dwindled to $79.8 million (7.5 billion yen) but the automaker raised forecasts for the full year on optimism about better auto sales.

The results for the fiscal first quarter were better than the flood of red ink some analysts had forecast.

The numbers also show that Japan's No. 2 automaker, reputed for ecological small cars including the Insight hybrid and the Accord sedan, is holding up better than its rivals during the global economic slump.

Tokyo-based Honda raised its forecast for the full year through March 2010 to a $585.1 million profit from $425.5 million.

Other Japanese automakers, including Toyota, the world's biggest, are forecasting deep losses for the full fiscal year.

Even with the raised forecast, Honda will be posting a 59.9% decrease in profit for the fiscal year, for the second consecutive year of slipping profits.

The previous fiscal year, Honda had posted a 137 billion yen profit — a result that's dismal for once-booming Honda, reflecting the fallout from the global financial crisis, which hit last year.

Honda's quarterly sales tumbled 30.2% to $21.3 billion from a year earlier.

It sold 766,000 vehicles around the world during the quarter, down 20.4%, mainly because of crashing sales in the key North American market.

For the full fiscal year, Honda expects to sell 3.295 million vehicles globally, better than its April projection for selling 3.2 million vehicles. For the fiscal year ended March 31, Honda's global vehicle sales totaled a stronger 3.52 million vehicles.

With mature markets like the U.S., Europe and Japan stagnant, Honda is looking to new markets for growth. Honda said earlier this week that it posted record production for Honda in China for the first half of this year.