Profit at Honda climbed 8.8 percent for the most recent quarter on strong sales in North America, Europe and Asia, prompting Japan's No. 2 automaker on Wednesday to raise its full-year profit forecast slightly.

Honda Motor Co., which makes Accord and Civic cars, reported group net profit of 144.8 billion yen (US$1.2 billion) for October-December, up from 133.1 billion yen the same period a year earlier. It was the first time in three years that earnings in the fiscal third quarter rose year-on-year.

Quarterly sales jumped 12 percent to 2.77 trillion yen (US$22.8 billion), marking the seventh straight year of record sales for the fiscal third quarter.

Rising gas prices have generally worked as a plus for Japanese automakers like Honda and Toyota Motor Corp. because they have a reputation for good mileage.

Honda said auto sales were healthy around the world, but especially in North America, where the Accord compact car and CR-V sport-utility vehicle sold briskly, as well as in China, where the auto market is growing.

Honda surpassed Nissan Motor Co. to regain the No. 2 spot among Japanese auto makers last year as measured by global vehicle production. The last time Honda was No. 2 in Japan was 2003.

For the year through March, Honda boosted its profit forecast to 560 billion yen (US$4.6 billion) up from its earlier forecast of 555 billion yen (US$4.56 billion). However, that's down from the previous fiscal year's net profit of 597 billion yen.

Honda kept its sales forecast for the full year unchanged at 11.1 trillion yen (US$91 billion), up 12 percent from the previous year.

Honda sold 915,000 vehicles during the latest quarter, up 12.1 percent from the same period a year earlier.

Although vehicle sales were flat in Japan, they surged 22 percent in Europe, 32.5 percent in Asia and 8.5 percent in North America, the company said.

A weak yen also boosted Honda's earnings, adding 10.6 billion yen (US$87 million) during the quarter.

For the first nine months of the fiscal year, Honda earned a 416.1 billion yen profit (US$3.4 billion), up 10.2 percent from 2005, on 7.999 trillion yen (US$65.8 billion) sales, up 13.1 percent.

Healthy overseas sales, cost cuts and a weak yen, which boosts the value of overseas earnings, offset soaring material costs, discounts called incentives in North America and other expenses.

Honda sold 2.69 million automobiles during the nine months, up 8.2 percent from 2005. It expects to sell 3.39 million vehicles for the year ending March 31, up 8.1 percent from the previous fiscal year.

Toyota, which is closing in on General Motors of the United States as the world's No. 1 automaker in global vehicle production and sales, reports earnings next week, while Nissan reports earnings Friday.

Honda shares, which have gained nearly two-thirds in value over the past year, closed down 1.3 percent at 4,750 yen (US$39).