With an 88 percent fall in operating profit during the April-June quarter, largely due to weakened demand, Japanese automaker Honda Motor Co. surprisingly managed to beat the analysts' estimates of a quarterly loss! As a result, the company has revised upwards its forecast for the year, due to an improved outlook for its worldwide car sales.

While the operating profit of 25.2 billion yen during the quarter stood a pale comparison to the 210.5 billion yen profit in the same-quarter last year, the figures still beat a consensus analyst estimate for a 106 billion yen loss.

In a statement, the Tokyo-based automaker said that it now projects an operating profit of 70 billion yen and a net income of 55 billion yen in the year ending March - indicating a clear lift of its previous forecast of a 10 billion yen operating profit and a 40 billion yen net income.

Honda, which did not include the impact of government incentives in its April forecast, has now made provision for that - especially with the lawmakers sating that the "cash- for-clunkers" program in the US may bring about nearly 250,000 new car sales.

Commenting on the revised forecast by Honda, Mamoru Kato, an analyst at Tokai Tokyo Research Center in Nagoya, said: "With the stimulus measures, the demand outlook is improving from what it was three months ago."