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Honda has record first-quarter profit

Honda Motor Co said first-quarter profit rose a less-than-expected 20 percent as Japanese consumers bought less expensive cars. Japan's second-largest automaker left full-year forecasts unchanged.

Group net income for the three months ended June 30 rose to a record for any quarter of Japanese yen 107.5 billion (US$903 million), or Japanese yen 110.4 a share, from Japanese yen 89.4 billion, or Japanese yen 91.7 a share, a year earlier. The result fell short of the average Japanese yen 121 billion profit estimate from six analysts surveyed by Bloomberg News.

"That's a disappointing number. I was expecting about a 30 percent increase" in profit, said Nobuaki Murayama who manages Y60 billion in assets at Cigna International Investment Advisors KK and holds Honda shares. "I may have to reduce my Honda position."

The maker of Odyssey minivans is the most reliant among Japanese automakers on the US market for its profit, leaving it vulnerable to a tumbling dollar. Honda's increased share of the home market may also fail to translate into rising profit as customers opt for smaller, cheaper compact cars rather than sedans, analysts said.

The company left its full-year forecasts unchanged. Honda said in April net income for the business year ending March 31, 2003 would rise 27 percent to Japanese yen 460 billion, a second year of record earnings. Sales will rise 10 percent to Japanese yen 8.1 trillion, the company said then.

First-quarter group sales rose 10 percent to Japanese yen 1.94 trillion.
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