Honda has reported a 40 per cent surge in operating profit in the most recent quarter as a result of a more profitable sales mix and aggressive cost cuts which offset foreign exchange loss.

On Tuesday, the company announced that its operating profit rose to $1.85 billion in the second quarter of this year. From July to September Honda witnessed a 21 percent advance in net income to $1.85 billion.

The company shone in global revenue with a 1.7 percent increase to $33.78 billion even as worldwide sales declined 3.6 per cent to 1.25 million vehicles in the three-month period.

Sales in North America also bolstered the company performance by booking a $470.4 million regional operating profit in the quarter, compared to the $5.81 million of operating loss last year.

“As far as our four-wheeler business goes, we have since last year revised our production system in line with the demand of the market in North America so that we were able to boost light truck sales,” Executive Vice President Seiji Kuraishi said while outlining results.

However, group sales in North America fell by 5.3 percent to 428,000 vehicles in the quarter. This was partly because of crimped supply from Mexico. In June, the company had suspended its operations in its Celaya assembly plant due to an unprecedented release of water from a nearby dam that had filled to dangerous levels after a torrential rain.

Reports also suggest that Honda’s European sales fell 12 percent to 38,000 units in the three months as regional operating profit tumbled to $2.08 million, from $22.3 million a year earlier.