Honda Earnings Climb 12%

Honda Motor Co. on Wednesday posted an unexpectedly strong 12% gain in fiscal first-quarter profit, largely because of strong worldwide auto sales that helped offset unfavorable currency rates.

Japan’s third-biggest automaker reported profit of 114.2 billion yen ($1.05 billion) in the period ended June 30, up from 101.8 billion yen a year earlier. The increase came despite a weakening dollar that lowered the value of crucial U.S. sales when converted into yen.

Sales rose 3% to 2.073 trillion yen ($19.05 billion) from 2.008 trillion yen. Honda doesn’t break out regional performance, but company insiders have said U.S. sales typically account for 75% to 80% of its global operating profit.

Honda said it sold 772,000 autos worldwide in its first quarter, up 9%. Sales in the U.S. rose 4.3% to 374,223 cars and trucks from 358,524 a year earlier. U.S. sales represent nearly half of Honda’s unit volume.

U.S. sales were boosted by strong demand for Honda and Acura sport utility vehicles, especially the Honda Pilot.

“We are right where we need to be,” said Dan Bonawitz, vice president for automotive corporate planning at American Honda Motor Co. in Torrance. “This is an extremely tough market with a lot of drastic [incentive] activity going on,” he said.

Yet Honda, which offers few incentives, is outpacing General Motors Corp., Ford Motor Co. and DaimlerChrysler’s Chrysler Group in its sales gains. The three domestics, in fact, have been losing market share to importers despite leading the industry in vehicle incentives.

For the first six months this year, Honda sales in the U.S. rose 2.5% to 686,024 vehicles.

The company expects to get a boost with the fall introduction of a redesigned Odyssey minivan and an Acura RL sedan. Also, Honda will launch a hybrid gasoline-electric powered Accord sedan in the U.S. this winter and its first pickup-type truck -- which it calls an “SUT,” or sport utility truck -- early in 2005.

Honda’s foreign sales volume for its fiscal first quarter rose 11.4% to 618,000 vehicles. Sales in Japan were up a scant 0.7%.

Honda’s shares rose 59 cents to $23.67 on the New York Stock Exchange.

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Times wire services were used in compiling this report.