On the Dash:
- Honda’s Q1 profit jumped 129% to 450.9 billion yen with no EV-related losses recorded
- Record operating profit came as tariff cuts and a weaker yen boosted results
- Honda raised its full-year profit forecast despite continued sales declines in China
Honda reported its fiscal first-quarter earnings on August 5, with profit more than doubling from the previous year as the automaker hit record operating profits and boosted its full-year forecast.
In the automaker’s Consolidated Financial Results, it reported 450.9 billion yen ($2.9 billion) in profit attributable to shareholders for the three months ended June 30, up 129.3% from 196.6 billion yen a year earlier. Operating profit hit 530.7 billion yen, a record for any quarter in company history and up 117.4% year over year. Sales revenue climbed 13.5% to 6.06 trillion yen ($38 billion).
The results mark a sharp reversal from Honda’s fiscal year ended in March, when the automaker posted its first full-year net loss in company history. That loss stemmed from roughly 1.45 trillion yen in EV-related charges after Honda scaled back its electrification plans. The company recorded no EV-related losses this quarter, a turnaround from the same period last year, when a tariff hit and EV write-downs cut profit in half.
Additionally, the automobile business swung to a 192.1 billion yen profit from a 29.6 billion yen loss a year ago, even as sales in China kept falling. North America drove the rebound, with U.S. auto sales rising as buyers gravitated toward fuel-efficient and hybrid models amid higher gas prices.
Meanwhile, Honda’s motorcycle business also delivered a standout performance, posting a record 233.9 billion yen in operating profit and a 20.5% operating margin on strong sales in India and Brazil.Â
A weaker yen and lower U.S. tariff rates both worked in Honda’s favor. The automaker’s foreign exchange assumption moved to 155 yen per dollar from 151 yen, adding 90.8 billion yen to operating profit. Tariff impacts added another 78.1 billion yen, reflecting the reduction in U.S. auto tariffs on Japanese vehicles to 15% from an earlier 27.5%.
Honda’s chief financial officer said the Chinese economy remains soft and that the shift away from gasoline-powered vehicles there is accelerating, a trend he linked partly to rising oil prices, according to The Wall Street Journal.
For dealers, the numbers point to a manufacturer with more room to invest in hybrid and cost-reduction programs after a year of absorbing EV write-downs. Honda left its global sales targets unchanged at 3.39 million vehicles for the fiscal year, but raised its operating profit forecast by 150 billion yen to 650 billion yen and its net profit forecast to 400 billion yen.
