Focus on progress from a strong first quarter toward the full-year plan in FY2027-H1

First-quarter revenue was ¥1.7058 trillion, up 22.0% year on year, operating profit was ¥158.0 billion, up 11.2%, and profit for the quarter attributable to owners of the parent was ¥183.6 billion, up 80.0%. The full-year forecasts are revenue of ¥6.9 trillion, operating profit of ¥540.0 billion, profit attributable to owners of the parent of ¥420.0 billion and earnings per share of ¥217.69. At the end of the first quarter, progress against these forecasts was 24.7% for revenue, 29.3% for operating profit and 43.7% for net profit. Since net profit is progressing well ahead of operating profit and revenue, the first-half results should also be assessed for earnings quality, including non-operating income and expenses and the tax burden.

In the first quarter of the previous year, revenue was ¥1.3978 trillion, operating profit was ¥142.1 billion and net profit was ¥102.0 billion. Revenue increased by ¥308.0 billion and operating profit by ¥15.9 billion, indicating improvements in both business scale and core operating profit on a simple year-on-year comparison. However, first-half revenue in the previous year was ¥2.8642 trillion and operating profit was ¥276.5 billion. The next results announcement therefore needs to distinguish between whether the second quarter alone maintained year-on-year revenue and profit growth and whether cumulative first-half results exceeded the previous year.

The first-quarter operating margin was approximately 9.3%, above the full-year forecast of approximately 7.8%. The operating margin for FY2026 was also 9.9%, so rather than indicating that current margins are unusually high, this may suggest that the full-year plan incorporates a degree of normalization in second-half selling expenses, raw-material prices, foreign exchange and electrification-related costs. At the next results announcement, it will be important to see whether the company discloses the first-half operating margin, segment margins for four-wheel vehicles, two-wheel vehicles and marine, and the profit increases attributable to price increases, model mix and cost reductions.

The next results announcement is reportedly scheduled for 10 November 2026. The key issue is not only whether the full-year forecast is maintained, but also the assumptions for the second half based on first-half results. In particular, the company should break down the factors behind changes in profit to determine whether the strong first-quarter net-profit progress included one-off factors and whether the increase in operating profit was driven by higher unit sales, pricing, foreign exchange or cost improvements.