Honda Motor Co., Ltd.

Honda said first-quarter operating profit rose JPY 286.5 billion year over year to a record JPY 530.7 billion, with quarterly profit attributable to owners of the parent up JPY 254.2 billion to JPY 450.9 billion. Adjusted operating profit was JPY 530.7 billion, up JPY 164.5 billion year over year; equity-method investment profit was JPY 22.6 billion, and free cash flow from non-financial services businesses was JPY 128.3 billion. By segment, motorcycle operating profit was JPY 233.9 billion, automobile operating profit was JPY 192.1 billion, financial services profit was JPY 105.8 billion, and power products/other posted a JPY 1.1 billion loss. For the full year ending March 31, 2027, Honda raised operating profit guidance to JPY 650 billion, raised profit attributable to owners to JPY 400 billion, and lifted adjusted operating profit guidance to JPY 1.170 trillion; unit sales guidance was unchanged at 22.8 million motorcycles, 3.39 million automobiles, and 3.65 million power products. The annual dividend guidance stayed at JPY 70 per share. The company also said net cash in the non-financial services business was JPY 3.3 trillion at quarter-end.

Masao Kawaguchi said the quarter was strong because of better-than-expected motorcycle performance, resilient North America auto demand, and a favorable foreign-exchange backdrop. He emphasized that Honda’s business mix and regional footprint helped offset weakness in China, and said the company will continue to monitor Middle East-related cost risk and the post-earthquake recovery in Japan. On strategy, he highlighted efforts to rebuild competitiveness in China through local suppliers, platform discussions, and the recently extended GAC joint-venture agreement, while also noting Honda wants to grow Japan EV demand with new models.

Kawaguchi and Takahashi pointed to record Q1 operating profit of JPY 530.7 billion, with foreign exchange adding JPY 90.8 billion and tariffs adding JPY 78.1 billion to adjusted operating profit year over year. Takahashi broke out the segment figures: motorcycles at JPY 233.9 billion, automobiles at JPY 192.1 billion, financial services at JPY 105.8 billion, and power products/other at a JPY 1.1 billion loss. He also said net cash was JPY 3,331.8 billion, operating cash flow after R&D adjustment was JPY 737.1 billion, and free cash flow from non-financial services businesses was JPY 128.3 billion. On capital returns, the annual dividend remained JPY 70 per share, with Honda still targeting DOE 3% and emphasizing stable, sustainable dividends.

Analysts focused on three issues: why no EV-related losses were recorded in Q1, why China sales are weak and whether the outlook should be cut, and how the Kumamoto earthquake will affect production and unit sales. Management said EV-related losses were not booked yet because supplier compensation negotiations are still ongoing, and the full-year JPY 520 billion forecast mainly reflects the weaker yen. On China, Honda said the market is shrinking sharply for ICE and hybrid vehicles, the company is in a model-change transition, and the GAC contract extension was announced early to ease dealer and customer concern. On the earthquake, Honda said it has not yet quantified the unit-sales impact, supplier damage is still being assessed, and production suspensions at Kumamoto, Saitama, and Suzuka are based on current information and may change as recovery progresses.