TOKYO, April 27 (Reuters) - Honda Motor Co said on Tuesday its annual operating profit fell 17 percent as domestic sales flagged, and it forecast a tough year ahead after it was unseated as Japan's second-largest car maker.
Honda forecast a 6.7 percent drop in operating profit to 560 billion yen ($5.15 billion) for this business year even as the launch of new, high-profit models such as the Odyssey minivan are expected to spur a recovery in domestic sales.
The forecast fell far short of analysts estimates of a 615 billion yen operating profit, according to Reuters Research.
Honda, also the world's top motorcycle maker, said operating profit was 600.14 billion yen in the year ended March 31, compared with analysts' consensus estimate of 630 billion yen.
But net profit grew 8.8 percent to 464.34 billion yen, thanks partly to robust earnings in China, which are not counted at the operating level.
The results came a day after rival Nissan Motor Co reported a 12 percent jump in annual operating profit. With sales totalling 3.057 million units last business year, Nissan relegated Honda to the third rank among Japan's car makers.
Shares in Honda gained 20 percent during the 12-month period, underperforming a more than 40 percent rise in both the transport sector subindex and the Nikkei average . ($1=109.04 yen)