Honda posts 78% rise in Q1 profit on U.S. sales jump

TOKYO (Reuters) -Japan’s Honda Motor (TYO:) reported a 78% rise in quarterly profit on Wednesday, boosted by increased sales, especially in the North American market, and a weaker yen.

Japan’s second-biggest automaker by sales said its operating profit totalled 394.4 billion yen ($2.76 billion) in the three months through June, handily beating the average 324.74 billion yen estimate in a poll of 10 analysts by Refinitiv.

That compared with a 222.2 billion yen profit in the same period last year.

Like other automakers, Honda said it benefited from strong sales to retail customers in the key U.S. market, posting a 44.7% year-on-year jump to 347,000 units, as the impact of post-pandemic disruptions in the supply of parts and chips eases.

That contrasted sharply with a steep 5% drop in sales in China to 309,000 vehicles that Honda reported for the quarter, faced with growing local competition and a rapid shift to electric vehicles in the world’s biggest car market.

Business conditions in China had grown worse for Honda compared to when it issued its forecast of selling 1.4 million vehicles for the full year, a Honda official said.

“We’re still operating amid some restrictions from semiconductors,” the official said.

“If we were to revise our sales forecast in China, we’ll want to move ahead with considering whether we can distribute parts to and manufacture more in other regions.”

Honda maintained its forecast for a 1.0 trillion yen operating profit for the current year, lower than the 1.117 trillion yen average forecast from 22 analysts.

The company will weigh the need for an update to its full-year outlook including the benefits it sees from a weakening yen when it announces second-quarter results around the start of November, the official added.

($1 = 143.1200 yen)