Honda Motor quarterly revenue halves, lacking estimates as U.S. auto tariffs chunk

Japanese auto large Honda‘s first-quarter working income fell 50% 12 months over 12 months on Wednesday, lacking estimates attributable to U.S. auto tariffs and a stronger yen.

Listed here are Honda’s outcomes in contrast with the imply estimates from LSEG:

• Income: 5.34 trillion yen vs. 5.25 trillion yen
• Working revenue: 244.17 billion yen vs. 323.48 billion yen

Within the first quarter of its fiscal 12 months, which ends on March 31, 2026, Honda’s income got here in at 5.34 trillion yen, beating imply estimates from LSEG.

Working revenue fell about 50% to 244.17 billion yen, lacking LSEG’s imply estimates of 323.48 billion yen.

Nonetheless, Japan’s second-biggest carmaker mentioned that the influence of the auto tariffs could be smaller than beforehand anticipated. The corporate additionally forecast the yen to weaken additional, because it raised its full-year working revenue forecast by 200 billion yen, or 40%, to 700 billion yen in comparison with its earlier forecast of 500 billion yen.

A Honda government mentioned in an earnings name that the influence of tariffs could be mitigated by Honda’s manufacturing crops within the U.S. 

“Our native manufacturing manufacturing ratio is excessive to start with… our stance is to supply the place there may be demand,” he mentioned, including that it might search for methods to extend manufacturing quantity within the U.S. with out spending an excessive amount of on the capital funding.

The corporate can also be contemplating build up manufacturing stateside for its new vitality automobiles to keep away from tariffs.

Shares of Honda rose 1.7% after its earnings launch earlier than paring positive factors.

The corporate’s bike enterprise noticed its gross sales increase in markets like Brazil and Vietnam to attain its highest-ever quarterly working revenue. In the meantime, Honda famous that its electrical car gross sales remained robust in North America. 

The U.S. accounted for round 1 / 4 of Honda’s exports from Japan within the first half of the 12 months. Its international gross sales fell 5% over the interval, impacted by declines in China, Asia and Europe.

Auto exports to the U.S. are a cornerstone of Japan’s economic system, making up 28.3% of all shipments in 2024, Japan’s customs information confirmed.

Japan’s carmakers have been doubling down on value cuts to retain market share within the U.S. after President Donald Trump‘s 25% tariffs on imported automobiles, which got here into impact on April 3. 

Trump introduced a brand new commerce take care of Japan on July 22 that’s mentioned to incorporate a decrease tariff charge of 15% on Japan-made car imports to the U.S. Nonetheless, the timeframe for the change to take impact was not clarified.

In June, the worth of Tokyo’s automobile exports to the U.S. fell 25.3% 12 months over 12 months, despite the fact that automobile export volumes to the U.S. rose by 4.6% in the identical interval, based on information from Japan’s commerce ministry.

Toyota, Japan’s largest carmaker, is about to report earnings on Thursday, with economists polled by Reuters anticipating that it’ll put up its lowest working revenue in over two years. That comes regardless of the corporate reporting that its worldwide gross sales reached document highs within the first six months of the 12 months.

Again in February, Honda and Nissan terminated talks over a $60 billion merger, which might have created the world’s third-largest automaker by gross sales quantity.

Japanese Prime Minister Shigeru Ishiba mentioned Monday he wouldn’t hesitate to talk with President Donald Trump to make sure the reduce to U.S. car tariffs is applied quickly.

The nation’s chief commerce negotiator Ryosei Akazawa left for Washington on Tuesday, searching for to press Trump to signal an government order that will verify the precise date for the auto tariffs to be lowered.