Summary
- Automaker lifts full-year operating profit forecast by 30%
- Weaker yen helps boost earnings in April to June quarter
- Operating profit more than doubles in quarter, beating analysts’ forecasts
TOKYO, (Reuters) – Honda Motor raised its full-year forecasts on Wednesday and posted its first quarterly profit rise in six quarters, boosted by a weaker yen and the absence of U.S. tariff-related costs that weighed on earnings a year earlier.
Japan’s second-biggest automaker lifted its full-year operating profit forecast by 30% to 650 billion yen ($4.1 billion) from 500 billion yen, citing a revised exchange-rate assumption. It also raised its net profit and revenue outlooks.
Operating profit more than doubled to 530.8 billion yen in the April to June quarter from 244.2 billion yen a year earlier, well above the 302.1 billion yen median estimate in an LSEG poll of nine analysts.
Honda assumed the yen will trade at an average rate of 155 per dollar this fiscal year, compared to 145 expected previously.
HONDA COMING OFF THE BACK OF FIRST YEARLY LOSS IN DECADES
The results come after the struggling automaker posted its first annual loss in nearly 70 years in May, hit by more than $9 billion in costs to restructure its electric-vehicle business.
Honda said it did not book any restructuring-related charges in the first quarter, adding that negotiations with suppliers affected by the overhaul, many of them in North America, were still ongoing.
It said it expected to face extra restructuring costs of 520 billion yen this business year, up from 500 billion yen forecast previously.
HIGH FUEL PRICES DRIVING CONSUMERS TO ELECTRIC MODELS
CEO Toshihiro Mibe apologised for Honda’s performance at the company’s annual shareholder meeting in June, but won backing for his reappointment to the board.
The company had already reported that global automotive sales fell 4% to 838,000 cars in the first quarter.
Worldwide sales were dragged down by a near 50% slump in China and declines elsewhere in Asia as more consumers opted for EVs due to high fuel prices, offsetting gains in the U.S. and Japan. The U.S. made up about half of Honda’s vehicle sales during the quarter.
Honda CFO Masao Kawaguchi told reporters that rising fuel prices in North America were increasing demand for its fuel-efficient hybrids and gasoline-powered models.
($1 = 157.7100 yen)
Reporting by Daniel Leussink; Editing by Jacqueline Wong and Jan Harvey
