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Honda’s profit falls 21% in second quarter

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TOKYO (AP) -- The strengthening Japanese yen helped push Honda Motor Co.'s net income down nearly 21 percent in the second quarter.

Japan's third-largest car company said Tuesday it earned 63.5 billion yen, or $594 million, in the July-September quarter from 80.1 billion yen in the same quarter last year.Net sales and other operating revenue fell 1.4 percent to 1.52 trillion yen, or $14.2 billion, from 1.54 trillion yen a year ago.

The company said sales of autos and power products were up, but that was not enough to offset a drop in unit sales of motorcycles -- down 9 percent -- and the rapid appreciation of the yen.

The yen has strengthened from an average of 139.92 yen to the dollar in the second quarter last year to 113.68 yen this year, a difference of more than 26 yen, Honda said.

A stronger yen causes made-in-Japan products to be more expensive overseas and means the company receives fewer yen when converting earnings from dollars.

Revenue from motorcycle sales fell 24.2 percent due primarily to lower sales in Asia, particularly in China and India.

Unit sales of autos were up 13.4 percent, and revenue rose 2.5 percent in part due to the strong performance of the Odyssey minivan in North America.

For the first six months of the fiscal year, Honda's net income fell 13.8 percent to 136.4 billion yen, or $1.3 billion, from 158.3 billion yen a year ago.

For the fiscal year, which ends March 31, 2000, the automaker forecast net income would drop 18 percent to 250 billion yen, or $2.3 billion, due to uncertainties in the U.S. and European economies.