Honda Motor Co. revealed on Friday that its first-quarter profits rose nearly 20 percent as opposed to 2014, citing a weaker yen and strong sales in the U.S. which helped to curb the impact of quality-related costs.
Honda's net profit for the quarter which ended June 30 was recorded at 186 billion yen ($1.5 billion), up from 155.6 billion yen ($1.26 billion) from last year, according to The Motley Fool. Honda reported the first-quarter results under international accounting standards for the first time.
The result beat the average net income of 145.8 billion yen ($1.18 billion) that analysts polled by Thompson Reuters previously predicted. Quarterly revenue was 3.7 trillion yen, up 15.5 percent from last year.
Similar to other Japanse automakers, Honda benefited from the reduced value of the yen, which boots the value of repatriated earnings.
"[Our profit gains] progressed at a faster pace than we had expected in the first quarter due to currencies and other factors, but we are not revising the full-year outlook as there are uncertainties such as future foreign exchange moves and costs related to quality issues," said Executive Vice President Tetsuo Iwamura, according to The Wall Street Journal.
However, Honda didn't benefit as much as other local automakers since the company recently shifted to local manufacturing in most key regions and reduced exports in its first quarter by 36 percent as opposed to a year ago - a move the company intends to backtrack from.
Despite this, sales in North America advanced 11 percent in the first quarter, driven by increased production of its HR-V SUV model at its new plant in Mexico, according to Yahoo! Finance. The U.S. market - its biggest - has been kind to many automakers who report higher sales there.
Asia also proved kind to Honda with car sales increasing by 19 percent, due to strong Vezel SUV sales in China.
The gains in Asia and North America cancelled out a 27 percent decline in Japan and a 16 percent drop in Europe.
Honda adopted a new accounting standard in April. The comparisons with last year's profits and revenue are based on calculations of what last year's figures would be under the new standard.
