Honda Motor (7267) Q1 2027 earnings summary

Executive summary

• Q1 FY2026 sales revenue rose 13.5% year-over-year to JPY 6,061.5 billion, with operating profit up 117.4% to JPY 530.7 billion and net profit attributable to owners up 129.3% to JPY 450.9 billion, driven by strong motorcycle and North American auto sales, and favorable currency effects, despite challenges in China and earthquake-related disruptions in Japan.

• Record-high quarterly operating profit and margin in the motorcycle segment, led by strong sales in India and Brazil.

• Automobile segment saw increased sales and profit in North America but continued struggles in China; operating margin improved to 5.0%.

• No EV-related losses posted in Q1, but full-year EV-related losses are forecast at JPY 520 billion, mainly due to North America strategy changes and currency impacts.

• Comprehensive income for the period was JPY 692.3 billion, a significant turnaround from a loss of JPY 3.8 billion in the prior year.

Financial highlights

• Q1 operating profit increased by JPY 286.5 billion year-on-year to JPY 530.7 billion, with operating margin improving from 4.6% to 8.8%.

• Quarterly profit attributable to owners rose by JPY 254.2 billion to JPY 450.9 billion year-on-year.

• Earnings per share rose to JPY 115.84 from JPY 46.80 year-over-year.

• Free cash flow for non-financial services businesses was JPY 294.0 billion; net cash at period end was JPY 3,331.8 billion.

• Cash and cash equivalents at period end were JPY 5,348.1 billion.

Outlook and guidance

• FY2027 sales revenue forecast revised up to JPY 24,150.0 billion (+10.8% YoY), with operating profit forecast at JPY 650.0 billion and adjusted operating profit (excluding EV losses) projected at JPY 1,170.0 billion.

• Annual dividend forecast maintained at JPY 70 per share, targeting DOE 3%.

• Exchange rate assumption revised to JPY 155 per US dollar for the year.

• Group unit sales guidance unchanged: motorcycles 22.8 million, automobiles 3.39 million, power products 3.65 million.