Subaru posts higher Q1 profit on strong U.S., Japan sales

TOKYO, Aug 3 (Reuters) - Subaru Corp on Thursday posted a 17.5 percent rise in its quarterly operating profit, buoyed by higher sales in its biggest market, the United States, and at home.

Operating profit at Japan's No.6 automaker came in at 119.3 billion yen ($1.08 billion) in the first quarter ended June, topping last year's 101.54 billion yen and exceeding forecasts for 114.80 billion yen from seven analysts polled by Thomson Reuters I/B/E/S.

Subaru retained its forecast for a flat full-year operating profit of 410 billion yen, as it expects rising costs related to incentives and research and development, along with ongoing air bag recall expenses, to offset higher sales. ($1 = 110.7200 yen) (Reporting by Naomi Tajitsu; Editing by Himani Sarkar)