What is the market's earnings forecast for Honda Motor next quarter?

What is the revenue and EPS growth rate for Honda Motor year over year?

Did Honda Motor beat or miss consensus estimates last quarter?

What does Honda Motor do and what are its main business segments?

What is Honda Motor's gross profit margin?

What were the key takeaways from Honda Motor’s earnings call?

What factors drove the changes in Honda Motor's revenue and profit?

What were the key takeaways from Honda Motor's earnings call?

- **Motorcycle Profit Surge**: Q1 operating profit JPY 189 billion (+11.3% YoY) driven by Brazil/Vietnam growth.
- **Tariff Impact Mitigation**: Revised JPY 400 billion tariff impact vs. JPY 650 billion prior; U.S.-Japan tariff cut to 15%.
- **EV Challenges**: JPY 650 billion FY26 EV expenses, including JPY 50 billion IRA subsidy loss; e:N Series underperformance in China.
- **China Sales Crisis**: 17-month decline; motorcycle resilience in South America offsets auto weakness.
- **U.S. Production Shift**: 3-shift operations planned to localize hybrid components and reduce tariff exposure.

**【CFO Summary Section】**
- Q1 2026 operating profit: JPY 244.1 billion (down JPY 240.5 billion YoY) due to tariffs, EV-related expenses, and currency impacts.
- Motorcycle segment: Record operating profit of JPY 189 billion (+11.3% YoY) driven by Brazil and Vietnam sales.
- Automobile segment: Operating loss of JPY 29.6 billion amid North America tariff challenges.
- Full-year forecast revised up: Operating profit JPY 700 billion (+JPY 200 billion YoY), net profit JPY 420 billion (+JPY 170 billion YoY).
- Tariff impact revised to JPY 400 billion (from JPY 650 billion) due to U.S.-Japan agreement; exchange rate assumption JPY 140/USD.
- Share buyback progress: JPY 936.5 billion of JPY 1.1 trillion program completed as of July 2025.

**【Kawaguchi's Financial Details】**
- Q1 2026 factors: 
  - Sales impact: +JPY 109.1 billion (North America auto, motorcycle growth)
  - Pricing/cost: +JPY 68.5 billion (price revisions)
  - Expenses: -JPY 69.4 billion (R&D, SG&A)
  - Currency: -JPY 86.1 billion (USD/JPY weakness)
  - EV-related: -JPY 113.4 billion (write-offs, losses)
  - Tariffs: -JPY 124.6 billion (U.S. import duties)
- Excluding one-time items: Adjusted operating profit JPY 482.1 billion (flat YoY).
- Cash flow: Free cash flow JPY 294 billion; net cash balance JPY 2,907.9 billion.

**【Q&A Highlights】**
- **Tariffs & Production**: 
  - U.S.-Japan auto tariff reduced to 15% from 25%; JPY 200 billion profit recovery expected.
  - Shifting production to U.S. (3-shift operations) to mitigate tariff impact; hybrid components localization in progress.
- **EV Strategy**: 
  - JPY 650 billion FY26 EV-related expenses (including JPY 50 billion IRA subsidy loss).
  - e:N Series underperformance in China; ADAS collaboration with Momenta planned.
- **China Sales**: 
  - 17-month decline due to NEV market competition; capacity adjustments ongoing.
  - Motorcycle segment resilience in South America, Vietnam offsets regional weakness.
- **Price Hikes**: 
  - JPY 100 billion tariff recovery via price adjustments; cautious approach due to U.S. economic conditions.
- **EV Timeline**: 
  - 0 Series launch delayed; focusing on U.S. production readiness post-IRA changes.


Honda Motor Co., Ltd. (HMC) Q1 2026 Earnings Call Transcript

- **Motorcycle Dominance**: Record unit sales (20.57M), operating profit (JPY 663.4B), and margin driven by volume growth and cost efficiency.
- **Hybrid EV Growth**: Automobile segment offset sales decline with hybrid EV expansion, targeting North America incentives.
- **Tariff Headwinds**: FY2026 minimum operating profit JPY 500B includes JPY 650B tariff impact, with short-term mitigation and mid-term US capacity expansion plans.
- **Dividend Policy Shift**: DOE-targeted 40% payout replaces fixed ratio, with FY2026 dividend increased to JPY 70/share.
- **EV Strategy Pivot**: Delayed Canada investment and focus on hybrid EVs for FY2026, with BEV timing contingent on market recovery.


**【CEO Summary Section】**
- FY2025 operating profit: JPY 1.2134 trillion (down JPY 168.4 billion YoY). Motorcycle business achieved record highs in unit sales (20.572M units), operating profit (JPY 663.4B), and margin. Automobile business saw unit sales decline (-43M units) due to China/ASEAN weakness and North American EV incentives, but hybrid EV sales expanded. Operating cash flow post R&D: JPY 2.800 trillion (same as FY2024). FY2026 outlook: Operating profit minimum JPY 500B (net profit JPY 250B) amid tariff uncertainty. Dividend policy shift to DOE targeting 40% payout, with FY2026 dividend increased to JPY 70/share (+JPY 2).

**【CFO Financial Commentary】**
- FY2025 financial results: Motorcycle operating profit up JPY 107.2B YoY (JPY 663.4B), driven by volume growth (+48.1B) and pricing/cost improvements (+175.3B). Automobile operating profit (pre-warranty change) down JPY 189.1B YoY (JPY 371.5B), due to sales volume decline (-333.7B) offset by pricing effects (+336.5B). FY2026 forecast: Operating profit JPY 1.402T (ex-tariffs), with JPY 452B FX impact and JPY 650B tariff impact (including JPY 500B auto, JPY 30.6B motorcycle, JPY 24.3B power products). Share buyback progress: JPY 589.5B of JPY 1.1T authorized repurchased as of April 2025.

**【Q&A Key Themes】**
- **Tariff Impact**: FY2026 estimated JPY 650B tariff impact (25% on non-USMCA compliant components). Short-term mitigation: inventory build in US, cost reduction, production allocation optimization. Mid-term: potential US capacity expansion (3rd shift, weekend production). Long-term: ongoing stakeholder engagement.
- **Canada Investment Postponement**: EV and battery plant delayed 2+ years due to slower-than-expected North American EV market growth. Project remains contingent on market recovery.
- **Competitor Comparisons**: Tariff impact estimates (JPY 450B) align with GM/Ford peers (JPY 450-500B annualized). Honda's motorcycle and component exposure drives higher estimate.
- **EV Strategy Adjustment**: FY2026 focus on hybrid EV expansion (North America) vs. BEV. Next-gen HEV models planned for late 2020s. BEV investment timing will depend on market conditions.
- **Human Resources**: Eiji Fujimura replaces retired EVP Aoyama. Leadership restructuring aims to maintain operational continuity amid strategic shifts.


Honda Motor Co., Ltd. (HMC) Q4 2025 Earnings Call Transcript

- **Motorcycle Growth Drives Profit**: ¥501.6 billion segment profit from 15.5 million units sold, offsetting automotive decline.
- **EV Incentives Weigh on Margins**: ¥100 billion+ EV incentive increase in North America threatens automotive profitability.
- **Share Buyback Continues**: ¥1.1 trillion repurchase underway, reflecting cash surplus and shareholder returns focus.
- **China Market Recovery Hinges on EVs**: ES series EV delays push FY25 China sales down 40%, but next-gen hybrids (FY27) offer long-term margin improvement.
- **Tariff Risk Mitigation**: Potential ¥20 billion+ impact from U.S. tariffs, with short-term production shifts to U.S. factories.


**【Management Opening Remarks】**
- **FY25 Q3 Financial Highlights**: Operating profit of ¥1.1399 trillion (7% margin), motorcycle sales up 15.5 million units, automobile sales down 297,000 units YoY due to China weakness. Operating cash flow after R&D adjustment remained stable at ¥1.945 trillion.
- **Full-Year Forecast**: Operating profit maintained at ¥1.42 trillion, profit for the year at ¥950 billion. Motorcycle unit sales revised up to record high, automobile down to 3.75 million units. Share buyback of ¥1.1 trillion underway, with ¥184.9 billion executed as of January 2025.
- **Market Trends**: Motorcycle growth in India, Brazil, and Vietnam; automobile decline in China offset by gains in North America and Japan.

**【CFO Financial Commentary】**
- **Profit Breakdown**: Operating profit up ¥63.5 billion YoY due to pricing improvements (+¥376 billion) offset by higher incentives (-¥104.3 billion), R&D costs (-¥97.5 billion), and currency effects (-¥56.3 billion). Motorcycle segment profit ¥501.6 billion, automotive ¥402.6 billion.
- **Cash Flow**: Free cash flow ¥693.7 billion, net cash ¥3.789 trillion. Capital expenditures and R&D spending aligned with prior guidance.
- **FY25 Outlook**: Operating profit up ¥38 billion YoY, driven by motorcycle growth, but squeezed by automotive incentives (-¥198 billion) and currency effects (-¥100.5 billion).

**【Q&A Highlights】**
- **Fourth Quarter Risks**: SGA and R&D expenses expected to rise by ~¥390 billion, partially offset by motorcycle margin improvements. EV incentives in North America may increase by ¥100 billion YoY.
- **Automobile Profitability**: ICE/hybrid cars maintain 8% margin, but EV development costs weigh on overall automotive profitability. Next-gen hybrids (FY27) expected to boost margins above 10%.
- **China Market Challenges**: Unit sales down 40% YoY due to quality delays in ES series EVs. NEV ratio expected to rise to 55%+ in FY26, squeezing ICE vehicle sales.
- **Tariff Risks**: 25% tariffs on Mexico/Canada imports could cost ¥20 billion+ in FY25Q4. Short-term mitigation includes shifting production to U.S., but long-term strategy unclear.
- **Share Buyback Rationale**: Optimize equity ratio (PBR 1x target), return cash to shareholders, and hedge against market volatility.
- **EV Strategy**: Launching self-developed EVs in North America (FY26) and China (FY27). Battery costs and U.S. tax credits (IRA) remain key uncertainties.


HMC

HMC fundamentals

Earnings Call

You can ask Aime