Honda has reported a 76% drop in fourth-quarter operating profit, missing analyst expectations as the company braces for the financial impact of U.S. auto tariffs. The Japanese automaker also downgraded its full-year forecast, citing global trade uncertainty and weakening vehicle sales in key markets.
For the quarter ending March 31, Honda posted an operating profit of 73.5 billion yen ($648 million), far below the 275.5 billion yen average estimate from LSEG. Revenue came in as expected at 5.36 trillion yen ($47.26 billion).
Looking ahead, Honda projects its operating profit will fall nearly 59% to 500 billion yen in the fiscal year ending March 2026. Net profit is forecast to drop 70.1% to 250 billion yen, while revenue is expected to decline 6.4% to 20.3 trillion yen. The company attributed the sharp revisions to volatility in global tariff policies.
Moreover, for the full fiscal year that ended in March 2025, Honda reported revenue of 21.69 trillion yen—up 6.2% year over year—and an operating profit of 1.21 trillion yen, down 12.2%. Net profit fell 24.5% to 835.84 billion yen.
In response to rising U.S. tariffs, Honda plans to shift production of its next-generation Civic hybrid from Mexico to Indiana, a move aimed at shielding one of its top-selling models from additional costs. The U.S. currently imposes a 25% tariff on foreign auto imports.
Honda also announced a shift in dividend policy—from a payout ratio to a dividend on equity—and forecasted an increase to 70 yen per share for the current year.
Separately, Nissan, Japan’s third-largest automaker, also posted a steep decline in quarterly earnings. Operating profit for the quarter fell 94% to 5.8 billion yen, while the company swung to a net loss of 676 billion yen ($4.5 billion). For the year, Nissan’s operating profit fell nearly 88% to 69.8 billion yen.
To reduce costs, Nissan plans to cut 20,000 jobs and consolidate its global production footprint from 17 to 10 plants by March 2028, aiming to save 500 billion yen over the coming years.
