But its earnings for the first half of its fiscal year edged up, and Honda raised its earnings forecast for the year.
The automaker said it earned 127.12 billion yen (£649m) in the July-September quarter, down from 137.36 billion yen (£702m) the same quarter last year.
Group sales in the quarter grew 3.8% to 2.094 trillion yen (£10.8 billion) from 2.017 trillion yen a year ago.
Honda said it earned 241.38 billion yen (£1.3 billion) in the six months ended September 30, up from 239.18 billion yen a year earlier. First half sales rose 3.5 percent to 4.167 trillion yen (£21.2 billion) from 4.025 trillion yen a year earlier.
Honda raised its profit outlook for the fiscal year ending March 31, 2005, to 447 billion yen (£2.2 billion), from its forecast in July for a profit of 417 billion yen (£2.1 billion) for the year. The forecast is about 4 percent below Honda's net profit for the last fiscal year.
For the quarter ended Sept. 30, Honda vehicle sales totaled 794,000 around the world. In Japan, sales were up 8% at 190,000, while overseas vehicle sales rose 8.1% to 604,000.