Honda Motor Co., Ltd.’s first quarter of the fiscal year ending March 2027 saw substantial profit growth, driven by the weaker yen and the reversal of EV-related losses. The company also disclosed an upward revision to its full-year forecast and trends in cash and cash equivalents.
Honda Motor Co., Ltd.’s results for the first quarter of the fiscal year ending March 2027 were revenue of ¥6,061.5 billion, operating profit of ¥530.7 billion, profit before tax of ¥605.0 billion and net profit of ¥450.9 billion. The operating margin was approximately 8.8% and ROE was approximately 3.6%. Operating profit increased 117.4% year on year and net profit increased 129.3%, representing substantial profit growth.
At the same time, the full-year earnings forecast was revised upward, with revenue raised to ¥24.15 trillion, operating profit to ¥650.0 billion and net profit to ¥400.0 billion. The main factor was the revision of the exchange-rate assumption from ¥145 to ¥155 per US dollar, with the reversal of EV-related losses and the weaker yen providing additional support.
Cash flow reflected continued active investment, with operating CF of ¥292.5 billion, investing CF of negative ¥399.0 billion, free CF of negative ¥106.5 billion and financing CF of ¥250.4 billion. Cash and cash equivalents at the end of the period stood at ¥5.348 trillion, leaving the company with ample liquidity.
As of Q1, the company had achieved most of its full-year targets, with progress of 81.6% for operating profit and 112.7% for net profit. However, attention is required regarding uncertain risk factors, including additional payments to business partners associated with the review of its airbag and EV strategies. Forecast EPS is ¥102.75, forecast PER is approximately 17.1 times, PBR is approximately 0.55 times, and the dividend forecast is ¥70, implying a dividend yield of approximately 4.0%.