TOKYO: Japan’s Honda Motor said on Thursday its third-quarter operating profit increased 5% from a year earlier, largely due to a strong performance of its motorcycle business and a weak yen, but missed analysts’ estimates.

Honda also said in a joint statement with smaller rival Nissan that the companies had agreed to end merger talks but would continue to cooperate in electric vehicles.

Honda, Japan’s second-biggest automaker, saw quarterly operating profit come in at 397.3 billion yen ($2.58 billion), versus an average estimate of 403.7 billion yen in a survey of seven analysts by LSEG.

Its automotive business benefited from stronger vehicle sales in the crucial U.S. market while sales in China declined in the quarter, it said in presentation materials.

Honda has been among Japanese car brands that has faced growing competition, including on price, in China following the rapid rise of Chinese electric vehicle makers.

The company retained its full-year operating profit forecast of 1.42 trillion yen, while revising its global sales outlook to 3.75 million vehicles from 3.8 million expected previously, mainly reflecting a decrease in Japan.

Reuters