UPDATE 1-Honda Q2 soars on sales growth, lifts forecasts

* Q2 op profit 163. 5 bln yen vs consensus 167 bln yen

* Lifts FY op profit forecast to Y500 bln from Y450 bln

* Cost cuts absorb forex losses

* Shares end down 0.3 pct before results
(Adds details, background)

TOKYO, Oct 29 (BestGrowthStock) – Honda Motor Co (7267.T: ) posted a
more than doubling in quarterly profit on Friday as sales in Asia
soared, and it lifted its annual forecasts for a second time as
it absorbs currency losses with further cost cuts.

Japan’s No.2 automaker has raised its global car production
for the past 10 months, with record output in China and other
parts of Asia thanks to brisk demand in those markets. Its market
share in its most profitable U.S. market fell during the quarter
but North American production has also grown, driven by a gradual
recovery there.

While Japanese automakers’ domestic operations are losing
money with the dollar’s fall to a 15-year low against the yen,
Honda’s lucrative and ubiquitous motorcycle business is helping
to cushion the blow.

The maker of the Accord and Fit models reported an operating
profit of 163.47 billion yen ($2.02 billion) for the
July-September quarter, up 150 percent from 65.5 billion yen a
year ago and roughly in line with the average 167 billion yen
estimated by three analysts surveyed by Reuters.

Second-quarter net profit, which includes earnings made in
China, was 135.93 billion yen, also up 150 percent, from 54.0
billion yen a year earlier. Sales grew 9.5 percent to 2.252
trillion yen.

For the year to March 31, 2011, Honda now expects an
operating profit of 500 billion yen, up 37 percent from last year
and above its previous forecast of 450 billion yen. A survey of
19 analysts by Thomson Reuters I/B/E/S forecasts profit of 524
billion yen.

It lifted its net profit forecast to 500 billion yen from 455
billion yen.

Honda is far less exposed to currency swings than rival
Toyota Motor Corp (7203.T: ), building only about a quarter of its
cars in Japan in the first half and selling 70 percent of that in
Japan. In contrast, Toyota produced 44 percent of its vehicles in
Japan during the same period, exporting just over half of that.

Honda changed its dollar rate assumption for the
October-March second half to 80 yen from 85 yen. The dollar
(JPY=: ) was trading around 80.70 yen on Friday in Tokyo.

Shares of Honda have risen about 9 percent in the past three
months, outperforming Tokyo’s transport sector subindex
(.ITEQP.T: ), which was flat, and the Tokyo market (.TOPX: ), which
fell 6 percent.

Its shares ended down 0.3 percent at 2,937 yen before the
results were announced.
(Reporting by Chang-Ran Kim; Editing by Joseph Radford)

UPDATE 1-Honda Q2 soars on sales growth, lifts forecasts