Honda Raises Outlook as Net Income Jumps 39%

Strong results in July-September have prompted Honda Motor Co. to hike its sales and earnings outlook for the fiscal year ending March 31.

The company reports sharp increases in quarterly operating profit (+38% to 228 billion yen/$2.2 billion) and net income (+39% to 177 billion yen/$1.7 billion).

Unit sales expanded 7% to 1.22 million vehicles worldwide. But unfavorable currency exchange effects caused revenue to fall 10% to 3.3 trillion yen ($31 billion).

Profits in the fiscal second quarter were aided by Honda’s shift in retirement age to 65 from 60 in Japan, which deferred pension plan payments by 84 billion yen ($800 million). A cost reduction program and lower-than-expected warranty costs contributed another 77.5 billion yen ($738 million).

For the full year, Honda now expects sales revenue will drop 8% to 13.4 trillion yen ($128 billion) from its previous forecast of 14.6 trillion.

But the company says the one-time pension windfall and stronger sales (5 million vehicles compared with 4.9 million) will help raise operating profits 29% to 650 billion yen ($6.2 billion) and net income 21% to 415 billion yen ($4 billion). Honda previously expected a fiscal 2017 operating profit of 600 billion yen and net income of 390 billion yen.