For the October-December quarter Honda, the second largest automaker in Japan, saw its profits jump an impressive 38.1 percent with higher than expected foreign sales.

More than half of Honda's sales are in the United States and North America where high gas prices and environmental concerns are driving consumers to smaller, more efficient vehicles.

The company's quarterly profit jumped $1.87 billion with sales up $28.52 billion for the quarter. Consequently, Honda has now raised its profit forecast for the fiscal year, which will end on March 31, to $6.46 billion.

Although the sales forecast for the fiscal year was lowered to $115.82 billion, that figure still represents an increase of 9.6 percent from last year.

Of the 991,000 vehicles Honda sold around the world, 481,000 were in North America, a jump of 2.1 percent with quarterly sales up in Europe by 25 percent and in Asia by 21 percent.

Cost trimmings through the year also improved Honda's numbers, but there is some concern that the company has fallen behind rivals like Toyota in important technologies like gas-electric hybrids. Honda's president, Takeo Fukui, has said, however, that Honda's commitment to and investment in those technologies will continue to grow.

On news of the strong quarterly numbers Honda's stock rose 1.2 percent in Tokyo to $30.90 a share. Later in the week Nissan will announce its earnings with Toyota reporting next week.