Honda’s Earnings More Than Double

Honda Motor Co. more than doubled its net income for the January-to-March quarter as soaring vehicle sales in Asia and Europe offset a decline in Japan.

Japan’s No. 3 automaker said Wednesday that it recorded 219.5 billion yen ($1.9 billion) in profit for the fiscal fourth quarter ended March 31. The results, an increase from 94 billion yen a year earlier, represented a record quarter for Honda.

Revenue jumped 20% to 2.83 trillion yen from a year earlier.

The results came a day after Japanese rival Nissan Motor Co. also reported healthy profit, in contrast to the losses reported by U.S. automakers General Motors Corp. and Ford Motor Co.

For the fiscal year, Honda reported a 23% rise in profit to 597 billion yen from fiscal 2004. Sales totaled 9.91 trillion yen, up 14.5%.

Contributing to the gains were cost-cutting efforts, a weaker yen and a reimbursement related to workers’ pension funds in Japan, the company said.

Honda sold a record 3.39 million vehicles worldwide for the fiscal year, up 4.6% from fiscal 2004 and the seventh straight year of increased vehicle sales.

Vehicle sales rose 6.8% in North America and 9% in Europe, but fell 2.2% in Japan. They jumped 14.2% in other markets.

Koji Endo, auto analyst with Credit Suisse First Boston in Tokyo, said Honda faced a challenge in maintaining its momentum for growth in the months ahead, as rising gasoline prices hurt sales of trucks and other vehicles in the U.S. that use more fuel. Expectations for a stronger yen also are expected to take a toll on the earnings of Japanese automakers.

“It’s going to be a tough year for Honda, especially in North America,” Endo said. “The results aren’t going to be all bad, but they aren’t going to be all good either.”

Honda is forecasting a 550-billion-yen profit for fiscal 2006, down 7.9%, but sales are expected to rise 7% to 10.6 trillion yen.

Toyota Motor Corp., Japan’s largest automaker, will report earnings next month.