Honda Motor Co., Ltd.

Honda reported Q1 operating profit of JPY 530.7 billion, up JPY 286.5 billion year over year, and quarterly profit attributable to owners of the parent of JPY 450.9 billion, up JPY 254.2 billion. Adjusted operating profit was also JPY 530.7 billion, up JPY 164.5 billion year over year. 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 and 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 from prior guidance, kept unit sales guidance unchanged at 22.8 million motorcycles, 3.39 million automobiles, and 3.65 million power products, and kept dividend guidance at JPY 70 per share. Adjusted operating profit guidance was lifted to JPY 1.170 trillion, and the company assumed JPY 155 per U.S. dollar.

Masao Kawaguchi struck an upbeat but cautious tone, emphasizing that Honda’s first-quarter results were strong enough to merit a record operating profit and a guidance increase. He highlighted motorcycle strength, North American auto momentum, and a solid domestic Japan market, while also noting that China remains difficult and the Middle East adds uncertainty. He also stressed that Honda will keep watching supply-chain and earthquake effects closely before deciding on further production actions.

Kawaguchi and Takahashi pointed to a strong balance sheet and favorable operating levers, with net cash in the nonfinancial services business at JPY 3.3 trillion, nonfinancial free cash flow at JPY 128.3 billion, and operating cash flow after R&D adjustment at JPY 737.1 billion. Takahashi said Q1 adjusted operating profit was helped by JPY 90.8 billion of foreign-exchange benefit and JPY 78.1 billion of tariff benefit, partly offset by JPY 6.1 billion of sales impact and JPY 3.3 billion of price/cost pressure. For the year, Honda raised operating profit guidance by JPY 150 billion, adjusted operating profit by JPY 170 billion, and profit attributable to owners by JPY 140 billion, while noting the FY forecast now assumes JPY 155 per dollar and that capex will include additional investment tied to acquiring factory buildings for the LG Energy Solution joint battery company in the U.S.

Analysts pressed Honda on why EV-related losses were not booked in Q1 and whether more would be recognized later; management said the supplier-compensation talks are still ongoing, the full-year EV loss forecast was kept at JPY 500 billion before FX took it to JPY 520 billion, and recognition will likely be phased in as visibility improves. Questions on China focused on the weak market, the company’s model transition, and the GAC joint venture extension; Honda said Chinese ICE and hybrid demand is shrinking sharply, it has already reduced ICE/hybrid capacity, and the JV extension was intended to reassure dealers and support a recovery strategy using local resources. Analysts also asked about earthquake impacts, incentives in North America, and semiconductors; management said it cannot yet quantify earthquake-related sales losses, incentives remain elevated due to competition but should be monitored against fuel prices, and semiconductor supply is not seen as a current problem, though memory prices are rising and Honda has already built in an extra JPY 20 billion to JPY 30 billion cost assumption.