Honda boosted its earnings forecast for the fiscal year ending March 31 after reporting impressive profitability improvements over its third quarter.
The automaker now expects to generate roughly $8.4. billion in annual profits, up 4.2% from its previous target of $8 billion. The upwardly revised estimate arrived as Honda revealed its operating profits rose 35% during the October-through-December period, hitting approximately $2.5 billion thanks to a sharp increase in global sales observed throughout 2023.
Honda sold almost 4 million units last year, representing a 5.6% increase in volume. While demand dipped in China, where domestic brands have started to claim more market share, the drop was offset by the company’s substantial success in the U.S., which saw deliveries rise 33% to approximately 1.3 million units.
The improvement marked the first time in eight years that Honda sales rose in North America, although the company’s 2022 numbers were heavily suppressed by supply chain disruptions and a global chip shortage. Compared to 2021, the company’s annual volume in the U.S. improved roughly 18%.
Honda is not the only automaker to boost its earnings forecast after a successful quarter. Ford and Toyota both posted optimistic profit targets earlier this week, citing inventory gains, rising sales, and stabilizing demand. However, other brands, such as Tesla, have displayed more caution toward 2024, citing concerns over high interest rates in the U.S. and unaffordable car prices, which have effectively blocked many consumers from the new vehicle market.