TOKYO, Feb 8 Reuters Japan39;s Honda Motor reported a sharp rise in operating profit for the December quarter and lifted its annual outlook, helped by robust sales in the United States, a more profitable product mix and a weaker yen.

The automaker raised its fullyear operating profit forecast by 4.2 to 1.25 trillion yen 8.4 billion, versus an earlier estimate of 1.2 trillion yen and an average analyst forecast of 1.271 trillion yen, according to LSEG data.

For the OctoberDecember third quarter, operating profit rose 35 to 379.8 billion yen, in line with the average estimate of 371.6 billion yen in a poll of nine analysts by LSEG.

Honda also announced a 336 million share buyback, saying it would purchase up to 0.7 of its own shares.

Honda said last month its global sales grew 5.6 to nearly 4.0 million vehicles in 2023, lifted by a 33 jump in sales in the United States and marking its first sales growth in its biggest market in eight years as the shortage of hightech chips abated.

In contrast, it saw a 10 sales slump in China to 1.2 million vehicles amid intense competition from newer Chinese auto brands.

Honda will have to optimise its manufacturing capacity in China and avoid ending up with excess production capacity after it brings online two new plants for building batterypowered vehicles, CFO Eiji Fujimura told a press briefing.

Honda, a laggard in the shift to batterypowered electric vehicles, unveiled plans last month to launch a new EV series from 2026,…