Honda presented a record-high profit outlook in its latest earnings, while weakness in the Chinese market remains a challenge. Its share price has recovered the decline following the loss revision and entered a rebound phase.
Honda Motor’s share price has recovered the decline following the loss revision and rebounded in July from its closing-price low. It is currently trading at around ¥1,683, with the dividend yield expected to be in the low 4% range.
In its results for the first quarter of the fiscal year ending March 2027, the company posted a 13.5% year-on-year increase in revenue and a 117.4% increase in operating profit, achieving substantial earnings growth. The four-wheel business remained profitable as EV-related losses declined. IV-related operations benefited from the weaker yen and reduced tariff impact, which boosted profit.
Honda raised its full-year forecasts to ¥24.15 trillion in revenue, ¥650 billion in operating profit and ¥400 billion in net profit. The main factor was an increase in its foreign-exchange assumption from ¥151 to ¥155 per dollar, resulting in upward revisions of ¥1 trillion for revenue and ¥150 billion for operating profit.
For its future plans, the company said it aims to achieve record-high operating profit of ¥1.4 trillion in the fiscal year ending March 2029. Growth in the motorcycle business is expected to be the main driver, with expansion of sales in India and avoidance of compensation and impairment losses associated with the transition to EVs likely to be key areas of focus.
Concerns have been raised that weak four-wheel vehicle sales in China will persist. The company explained that it plans to introduce EV models jointly with local partners and reduce costs to improve profitability.