Low demand sees Honda's profits plunge by more than half

AFP - Honda Motor said Tuesday its latest quarterly earnings plunged by more than half due to weak demand, but Japan's number two automaker upgraded its outlook for the rest of the year.

Honda posted a net profit of 54.0 billion yen (587 million dollars) for the three months through September, down 56.2 percent from a year earlier.

Revenue dropped by 27.2 percent on the year to 2.06 trillion yen, hit by weak car sales and a stronger yen, according to a company statement. Operating profit plunged 56.0 percent to 65.5 billion yen.

The group said it had sold 838,000 automobiles worldwide in the quarter, marking a decrease of 10.4 percent from the same period of last year.

But the outlook is brightening: Honda anticipates a net profit of 155 billion yen for the year to March 2010, compared with a previous projection of 55 billion yen. That would represent a 13.1 percent year-on-year increase.

Japanese carmakers have taken a heavy blow from the global economic downturn, which has caused worldwide sales to plunge.

Honda was the only one of Japan's top three automakers to post a profit for the last financial year to March, outperforming Toyota and Nissan which suffered heavy losses.