Japan’s Honda reports robust results after its first ever annual loss
Summary
Honda’s profit more than doubled in the first quarter of the new fiscal year after its first-ever annual loss. The company saw stronger sales in the U.S. and India, and it raised its profit forecast for the full year despite challenges like past electric vehicle costs and recent earthquakes in Japan.Key Facts
- Honda’s April-June profit was 456.9 billion yen (about $2.9 billion), up from 196.6 billion yen last year.
- Quarterly sales increased by 13.5% to 6.06 trillion yen ($38 billion).
- The company made a loss of 423.9 billion yen ($2.7 billion) for the fiscal year ending in March, mainly due to costs from electric vehicle plans.
- Honda reduced its electric vehicle plans as many consumers were not ready to switch and because of U.S. policies under President Trump, including cuts to EV incentives and tariffs on imports.
- Motorcycle sales were strong in Brazil and India; car sales grew in Japan and the U.S. but struggled in China.
- Honda expects to return to profit for the full fiscal year and raised its profit forecast to 400 billion yen ($2.5 billion) from 260 billion yen ($1.6 billion).
- A recent 7.1 magnitude earthquake in Kumamoto, Japan, disrupted some production and supply chains.
- A weaker Japanese yen helped Honda by increasing the value of its foreign earnings when converted to yen.
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