Honda Motor Co., Ltd. Q1 FY2026 earnings call

• Operating profit for the fiscal first quarter was JPY 244.1 billion, which was lower than the same period last year. Equity method earnings were JPY 4.2 billion, higher by JPY 2.7 billion. Profit attributable to the owner of the parent was JPY 196.6 billion, lower by JPY 197.9 billion.
• Full-year consolidated results forecast for March 2026 was revised up to operating profit of JPY 700 billion and net profit of JPY 420 billion, an increase of JPY 200 billion and JPY 170 billion respectively from previous forecasts, due to review of tariff impacts and exchange rate assumptions (USD assumed at JPY 140).
• Share buyback: JPY 936.5 billion worth of shares acquired as of July 31, 2025, out of the JPY 1.1 trillion resolved on December 23, 2024.
• Motorcycle operations had sales growth mainly in Brazil and other regions, leading to record high operating profit for the quarter. Automobile operations had strong sales in North America but were impacted by tariffs and EV nonrecurring expenses.

For the first quarter ended June 30, 2025, Honda's segment performance was as follows: Motorcycle operations had an operating profit of JPY 189 billion. Automobile operations had an operating loss of JPY 29.6 billion. Financial Services had an operating profit of JPY 85 billion. Power Products and other businesses had an operating loss of JPY 200 million. Motorcycle operations saw sales expansion in Brazil and Vietnam, achieving a record high operating profit for the quarter. Automobile operations were impacted by tariffs and nonrecurring EV expenses but had strong sales in North America.

• Full-year operating profit forecast revised up to JPY 700 billion, net profit to JPY 420 billion, up by JPY 200 billion and JPY 170 billion respectively from previous forecasts.
• Exchange rate assumption against the U.S. dollar for the year is JPY 140.
• Full-year dividend forecast for fiscal year ending March 2026 remains unchanged at JPY 70 per share.

• Uncertainty surrounding policy changes including tariffs, which could impact earnings.
• EV-related nonrecurring expenses, such as provisions for losses on EVs sold in the U.S. and write-offs of EV development assets.
• Intensifying competition in certain markets outside the U.S., like Asia and Europe, affecting sales and profitability.

Q: Impact from tariffs, especially between US and Japan, and Canada/Mexico.

A: Eiji Fujimura noted the tariff reduction between US and Japan from 25% to 15% is positive, but uncertainty remains for Canada/Mexico. Production in the U.S. is focused on where demand is, with considerations for localizing hybrid vehicle parts.

Q: Sales decline in Asia, Europe, Japan.

A: Eiji Fujimura mentioned competition from Chinese OEMs in Asia, varying hybrid vehicle adoption by market due to government subsidies, and struggles in Europe with past production site closures and need for reevaluation of market efforts.

Q: EV losses in the U.S. and price hikes.

A: Eiji Fujimura discussed EV-related nonrecurring losses, including write-offs and provisions, and cautiousness regarding price hikes due to economic and market factors.

Q: Sales in China and talks with Nissan.

A: Eiji Fujimura spoke about challenges in China with declining sales, adjusting capacity and expediting actions for EVs, and stated no decisions made yet on talks with Nissan regarding business collaboration.