Honda Reports Disappointing Q4 Earnings with Revenue Declines

Honda HMC reported earnings of 18 cents per share for the fourth-quarter fiscal 2025, falling short of the Zacks Consensus Estimate of 72 cents. This figure also represents a decline from the previous year’s profit of 99 cents per share. The company’s quarterly revenues totaled $35.1 billion, which is below both the Zacks Consensus Estimate of $35.6 billion and last year’s $36.5 billion.

Currently, HMC has a Zacks Rank of #3 (Hold).

Honda Motor Co., Ltd. Price, Consensus and EPS Surprise

Honda Motor Co., Ltd. price-consensus-eps-surprise-chart | Honda Motor Co., Ltd. Quote

Segmental Highlights

For the three-month period ending March 31, 2025, revenues from the Automobile segment fell by 2.8% year-over-year to ¥3.57 trillion ($23.4 billion), though this figure exceeded our projection of ¥3.4 trillion. The segment recorded an operating loss of ¥158.7 billion ($1.04 billion), a significant drop from an operating income of ¥100.1 billion in the same quarter of fiscal 2024. We had estimated an operating income of ¥94 billion.

The Motorcycle segment reported revenues of approximately ¥919.6 billion ($6.12 billion), reflecting a 6.7% annual increase, which was better than our estimate of ¥873 billion. The operating profit for this segment reached ¥161.7 billion ($1.06 billion), rising 11.8% year-over-year, and outperforming our forecast of ¥160.8 billion.

In the Financial Services segment, revenues totaled ¥849 billion ($5.56 billion), which is a 1.7% decline from the previous year and below our expectation of ¥879 billion. However, the division’s operating profit grew by 2.2% year-over-year to ¥70.6 billion ($462 million), although it fell short of our estimate of ¥75.2 billion.

Additionally, revenues from Power Products and Other Businesses reached ¥113.2 billion ($742 million), down 2.2% year over year, yet exceeded our forecast of ¥104.2 billion. This segment achieved breakeven, in stark contrast to an operating loss of ¥8.3 billion in the same quarter last year.

Financials & FY26 Outlook

As of March 31, 2025, Honda’s consolidated cash and cash equivalents stood at ¥4.53 trillion ($31.04 billion). Long-term debt was approximately ¥6.95 trillion ($47.67 billion), an increase from ¥6.06 trillion the year prior.

Looking ahead, Honda forecasts consolidated sales volumes for fiscal 2026 of 14.25 million units in Motorcycles, 2.83 million units in Automobiles, and 3.67 million units in Power Products. This estimate suggests a year-over-year growth of 4.1% in Motorcycle unit sales. However, Automobile and Power Product Unit sales are projected to decline by 0.3% and 0.8%, respectively, in fiscal 2025.

For fiscal 2026, Honda anticipates revenues of ¥20.3 trillion, signaling a 6.4% year-over-year decline. Operating profit is expected to be ¥500 billion, reflecting a significant contraction of 58.8%. The pretax profit forecast is ¥490 billion, representing a drop of 62.8% year-over-year. This subdued outlook is attributed to ongoing macroeconomic and tariff-related challenges. The company plans to pay an interim and a year-end dividend of ¥35/share in fiscal 2026.

Key Auto Releases

General Motors (GM) announced its first-quarter 2025 results on April 29, reporting adjusted earnings of $2.78 per share, exceeding the Zacks Consensus Estimate of $2.69. This figure is also an increase from the previous year’s $2.62. GM’s revenues of $44.02 billion topped the Zacks Consensus Estimate of $42.5 billion, rising from $43.01 billion in the year-ago period. The company held cash and cash equivalents of $20.57 billion as of March 31, 2025, with long-term automotive debt at $13.44 billion.

Ford (F) reported its first-quarter 2025 results on May 5, posting adjusted earnings per share of 14 cents, outperforming the Zacks Consensus Estimate of breakeven earnings but down from 49 cents recorded in the previous year. Ford’s consolidated first-quarter revenues reached $40.66 billion, a 5% year-over-year decrease. Total automotive revenues were $37.42 billion, surpassing the Zacks Consensus Estimate of $35.48 billion, but down from $39.89 billion a year ago. The company had cash and cash equivalents of $20.9 billion as of March 31, 2025.

Toyota (TM) released its fiscal fourth-quarter 2025 results on May 8, reporting earnings per share of $3.39, exceeding the Zacks Consensus Estimate of $2.92, though down from $4.99 in the year-ago quarter. Consolidated revenues reached $81.09 billion, surpassing the consensus mark of $78.47 billion and up from $74.56 billion in the same quarter last year. Toyota reported cash and cash equivalents of ¥6.09 trillion ($41.75 billion) as of March 31, 2025. Its long-term debt stood at ¥1.55 trillion ($10.6 billion), decreased from ¥1.93 trillion as of the previous year.

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.