(October 29, 2010) TOKYO — Honda has raised its profit forecast as surging sales in Asia outweigh the impact of a stronger yen. Honda expects net income of 500 billion yen ($6.2 billion) in the year ending March, compared with an earlier estimate of 455 billion yen, the company said in a statement today.

Sales may rise to 9 trillion yen from 8.6 trillion yen, the automaker said.

The company’s car sales increased in Japan and other Asian countries during the fiscal first half, while the company also raised its forecast for global motorcycle sales and said it would reduce capital spending. Honda raised its profit outlook even as the yen trades near a 15-year high against the dollar, reducing the value of overseas earnings.

“Honda is solidly increasing its profitability, and the motorcycle unit is also supporting the business,” said Tadashi Usui, an analyst at Moody’s Investors Service in Tokyo. “Compared with Toyota, Honda is more economical with its capital investments, so we can be confident about its finances from a fixed-cost perspective.”

Still, based on today’s statement, Honda expects to earn only 92 billion yen in the fiscal second half, compared with 408 billion in the first six months.

Source: Bloombrg News